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2020/06/30 Comprehensive Annual Financial Report
r 1i 1� For Rancho Cucamonga Residents and Businesses ONLY i . Rental Assistance Program �INiI COVID-19 s o0 ❑❑ Rental Forgiveness Program W COMMUNITY RELIEF d9' iI II dIIVNi' �fl I'' h l li dl PROGRAM � County Compliant Businesss Partnership II �I'� II�'�irl1bP' IQII, I, °;d, APPLICATIO PERIOD OPE NS N City Match August 24 2020 Business Operations 7r�Outdoor Assistance Program i ♦� '^� • _ Q • ,a Re Xi11 I"r1a = ® open for Business 568 ' , •1 ."o sne..a ` w"". c c",r� I, I • t Accommodations 4 1 "'"°"""° ''^°^"•' °�'+s. o°"9,a r Automotive Business Services Daycare 1 4 .i ' Z 6 Financial Gas Stations 36 - v Government 1 1 _ ® P © ® Q Grocery Gym and Fitness Center g v qHair Pal Salon 3cuc-. I Laundry g � • Legal Services 8 Medical 65 ® a _'mod Ml Pharmacy 4 v City of Rancho Cucamonga, California Comprehensive Annual Financial Report Year Ended June 30, 2020 Prepared by the City of Rancho Cucamonga Finance Department Tamara L. Oatman Finance Director THIS PAGE INTENTIONALLY LEFT BLANK City of Rancho Cucamonga Comprehensive Annual Financial Report June 30, 2020 Introductory Section THIS PAGE INTENTIONALLY LEFT BLANK CITY OF RANCHO CUCAMONGA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2020 TABLE OF CONTENTS INTRODUCTORY SECTION Letter of Transmittal ............. City Officials ......................... Organization Chart ............... Certificate of Achievement for Excellence in Financial Reporting ........................... FINANCIAL SECTION INDEPENDENT AUDITORS' REPORT................................................................... MANAGEMENT'S DISCUSSION AND ANALYSIS ................................................. BASIC FINANCIAL STATEMENTS Government -Wide Financial Statements: Statement of Net Position........................................................................... Statement of Activities................................................................................. Fund Financial Statements: Balance Sheet - Governmental Funds ........................................................ Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position................................................................. Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds................................................................ Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities................................................................................. Statement of Net Position - Proprietary Funds ........................................... Statement of Revenues, Expenses and Changes in Fund Net Position - Proprietary Funds................................................................. Statement of Cash Flows - Proprietary Funds ............................................ Statement of Fiduciary Net Position - Fiduciary Funds ............................... Statement of Changes in Fiduciary Net Position - Fiduciary Funds ........... Notes to Financial Statements........................................................................... Page 1 5 ..................... 25 ..................... 26 ..................... 28 ..................... 31 ..................... 32 ..................... 35 ..................... 36 38 40 44 45 47 CITY OF RANCHO CUCAMONGA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2020 TABLE OF CONTENTS Page Number REQUIRED SUPPLEMENTARY INFORMATION Notes to Required Supplementary Information........................................................................ 109 Budgetary Comparison Information: Budgetary Comparison Schedule - General Fund............................................................. 110 Budgetary Comparison Schedule - Development Impact Fees ......................................... 111 Budgetary Comparison Schedule - Lighting Districts........................................................ 112 Budgetary Comparison Schedule - Housing Successor Agency ....................................... 113 Budgetary Comparison Schedule - Fire District................................................................. 114 Pension Information: Schedule of Changes in Net Pension Liability and Related Ratios - Miscellaneous Plan - Agent Multiple -Employer Plan ...................................................... 115 Schedule of Plan Contributions - Miscellaneous Plan - Agent Multiple -Employer Plan......................................................................................... 116 Schedule of Proportionate Share of the Net Pension Liability - Miscellaneous Rate Plan - Cost Sharing Multiple -Employer Plan .................................. 117 Schedule of Plan Contributions - Miscellaneous Rate Plan - Cost Sharing Multiple -Employer Plan............................................................................. 118 Schedule of Proportionate Share of the Net Pension Liability - Safety Rate Plan - Cost Sharing Multiple -Employer Plan ............................................... 119 Schedule of Plan Contributions - Safety Rate Plan - Cost Sharing Multiple -Employer Plan............................................................................. 120 Schedule of Changes in Net Pension Liability/(Asset) and Related Ratios - PARS Retirement Enhancement Plan............................................................................ 121 Schedule of Plan Contributions - PARS Retirement Enhancement Plan .......................... 122 Other Post -Employment Benefit Information: Schedule of Changes in Net OPEB Liability/(Asset) and Related Ratios .......................... 123 Schedule of Contributions - OPEB..................................................................................... 124 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES Combining Balance Sheet - Nonmajor Governmental Funds .................................................. 128 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds................................................................ 136 Budgetary Comparison Schedules (Budgetary Basis) - Special Revenue Funds: GasTax.............................................................................................................................. 143 Recreation.......................................................................................................................... 144 Beautification...................................................................................................................... 145 Landscape Maintenance Districts...................................................................................... 146 PedestrianGrant................................................................................................................ 147 Community Development Block Grant............................................................................... 148 AssessmentAdministration................................................................................................ 149 CITY OF RANCHO CUCAMONGA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2020 TABLE OF CONTENTS Page COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES (Continued) Budgetary Comparison Schedules (Budgetary Basis) - Special Revenue Funds (Continued) AirQuality Improvement..................................................................................................... 150 MasiCommerce Center..................................................................................................... 151 MeasureI........................................................................................................................... 152 LibraryServices................................................................................................................. 153 PublicSafety Grants.......................................................................................................... 154 UsedOil Recycling............................................................................................................. 155 Library Services Grants...................................................................................................... 156 AB 2928 Traffic Congestion Relief..................................................................................... 157 LitterReduction Grant........................................................................................................ 158 SAFETEA-LU Grant........................................................................................................... 159 UndergroundUtilities.......................................................................................................... 160 Safe Routes to School Program........................................................................................ 161 Citywide Infrastructure Improvement................................................................................. 162 Proposition1B.................................................................................................................... 163 Public Resource Grants..................................................................................................... 164 Integrated Waste Management.......................................................................................... 165 SB1— TCEP....................................................................................................................... 166 PublicArt Trust................................................................................................................... 167 Budgetary Comparison Schedules (Budgetary Basis) - Capital Project Funds: CapitalProjects Fund......................................................................................................... 168 Combining Statement of Net Position - Internal Service Funds ............................................... 170 Combining Statement of Revenues, Expenses and Changes in Fund Net Position - Internal Service Funds.............................................................................. 171 Combining Statement of Cash Flows - Internal Service Funds ................................................ 172 Combining Balance Sheet - All Agency Funds......................................................................... 176 Combining Statement of Changes in Assets and Liabilities - AIIAgency Funds...................................................................................................................... 180 CITY OF RANCHO CUCAMONGA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2020 TABLE OF CONTENTS STATISTICAL SECTION Financial Trends: Page Number Net Position by Component - Last Ten Fiscal Years......................................................... 189 Statement of Activities (Condensed) - Last Ten Fiscal Years ........................................... 190 Fund Balances of Governmental Funds - Last Ten Fiscal Years ...................................... 192 Changes in Fund Balances of Governmental Funds - LastTen Fiscal Years........................................................................................................ 193 Revenue Capacity: Assessed Value and Estimated Actual Value of Taxable Property ................................... 194 Direct and Overlapping Property Tax Rates - Last Ten Fiscal Years ................................ 195 Principal Property Taxpayers - Current Year and Nine Years Ago ................................... 196 Property Tax Levies and Collections - Last Ten Fiscal Years ........................................... 197 Principal Sales Tax Remitters - Current Year and Nine Years Ago .................................. 199 Debt Capacity: Ratios of Outstanding Debt by Type - Last Ten Fiscal Years ............................................ 200 Ratios of General Bonded Debt Outstanding - Last Ten Fiscal Years .............................. 202 Direct and Overlapping Debt.............................................................................................. 203 Legal Debt Margin Information - Last Ten Fiscal Years .................................................... 204 Pledged -Revenue Coverage - Last Ten Fiscal Years ....................................................... 205 Demographic and Economic Information: Demographic and Economic Statistics - Last Ten Calendar Years ................................... 206 Principal Employers - Current Year and Nine Years Ago .................................................. 207 Operating Information: Full -Time and Part -Time City Employees by Function - Last Nine Fiscal Years ............... 208 Operating Indicators by Function - Last Nine Fiscal Years ................................................ 209 Capital Asset Statistics by Function - Last Nine Fiscal Years ........................................... 210 Mayor L. Dennis Michael I Mayor Pro Tem Lynne B. Kennedy Council Members William J. Alexander, Sam Spagnolo, Diane Williams City Manager John R. Gillison 10500 Civic Center Drive I P.O. Box 807 1 Rancho Cucamonga, CA 91729-0807 1 909.477.2700 1 www.CityofRC.us December 10, 2020 To the Honorable Mayor, Members of the City Council, and Citizens of the City of Rancho Cucamonga: With great pleasure, we present to you the City of Rancho Cucamonga's Comprehensive Annual Financial Report for the Fiscal Year ended June 30, 2020. The Comprehensive Annual Financial Report consists of three sections: introductory, financial, and statistical. The introductory section includes this transmittal letter, a list of principal officials, and the City's organizational chart. The financial section includes the independent auditors' report, management's discussion and analysis (MD&A), the basic financial statements, notes to financial statements, and combining and individual fund statements and schedules. The statistical section sets forth relevant financial and non -financial data depicting the City's historical trends and other significant facts. This report consists of management's representations concerning the finances of the City. Consequently, management assumes full responsibility for the completeness and reliability of all information presented in this report. Management provides a reasonable basis for making these representations by establishing a comprehensive internal control framework. One that is designed to protect the City's assets from loss, theft, or misuse and compile sufficient reliable information to prepare the City's financial statements in conformity with generally accepted accounting principles (GAAP). As management, we assert that this financial report is complete and reliable in all material respects to the best of our knowledge and belief. The City of Rancho Cucamonga's financial statements were audited by Lance, Soll and Lunghard, LLP, Certified Public Accountants. The goal of the independent audit was to provide reasonable assurance that the City of Rancho Cucamonga's financial statements for the Fiscal Year ended June 30, 2020, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. Based upon the audit, the independent auditor concluded that there was a reasonable basis for rendering an unmodified opinion that the City of Rancho Cucamonga's financial statements for the Fiscal Year ended June 30, 2020, are fairly presented in conformity with GAAP. The independent auditors' report is presented as the first component of the financial section of this report. The independent audit of the City's financial statements is part of a broader, federally mandated Single Audit, designed to meet federal grantor agencies' special needs. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements but also on the audited government's internal controls and compliance with legal requirements, emphasizing internal controls and legal requirements involving the administration of federal awards. These reports are available in the City of Rancho Cucamonga's separately issued Single Audit Report. GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of a MD&A. This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City's MD&A can be found immediately following the independent auditors' report. L PROFILE OF THE CITY OF RANCHO CUCAMONGA General Information The City of Rancho Cucamonga currently has an estimated population of 175,522 and encompasses approximately 46.5 square miles. It is located between the cities of Upland to the west, Ontario to the south, Fontana to the east, and is in the western section of San Bernardino County, which is in the southern part of the State of California. The local economy includes a diverse business base of office, light manufacturing and distribution, and retail, emphasizing the City's efforts to attract and retain sales tax -generating businesses to help provide a stable financial base. Government The City of Rancho Cucamonga (the City) was incorporated in 1977 as a general law city under the provisions of the Government Code of the State of California. It operates under the Council -Manager form of city government. The Mayor, City Treasurer, and City Clerk are elected at large. The four City Council members are elected by geographic district. The Mayor and Council members are elected on a staggered basis for a term of four years. There is no limit on the number of terms an individual can serve as Mayor or City Council members. The Mayor and City Council appoint the City Manager and City Attorney. Reporting Entity and Its Services The City has included within its reporting entity for financial reporting purposes all agencies for which the City is financially accountable. These agencies include the Rancho Cucamonga Public Improvement Corporation, the Rancho Cucamonga Fire Protection District, the Rancho Cucamonga Library, and the Rancho Cucamonga Public Financing Authority. The City provides accounting services to all these agencies. Additional information on these agencies can be found in Note 1 of the notes to financial statements. The City provides quality service by blending the talents of City staff and utilizing other agencies. Other specialized agencies furnish certain services necessary to continue the high quality of life, such as water and sanitation (i.e., sewage). The City provides building safety regulation and inspection, street lighting and beautification, land use planning and zoning, housing and community development services, maintenance and improvement of streets and related structures, traffic safety maintenance and improvement, animal care and services, and a full range of recreational and cultural programs for citizen participation. Police protection services are contracted from the San Bernardino County Sheriffs Department. The Rancho Cucamonga Public Improvement Corporation was established for charitable purposes, including rendering financial assistance to the City by financing, acquiring, constructing, improving, and leasing public improvements to benefit residents of the City and the surrounding area. The Rancho Cucamonga Fire Protection District was taken over from the County of San Bernardino in July 1989 to provide fire suppression and protection. The Rancho Cucamonga Library became a part of the City when it withdrew from the San Bernardino County Library System in July 1994. It strives to inform and enrich our community by providing access to traditional and technologically innovative resources. It also supports and encourages education and the love of reading in a welcoming atmosphere with a knowledgeable, service -oriented staff. The Rancho Cucamonga Public Financing Authority was established to facilitate the financing and the refinancing of construction, expansion, upgrading, and improvement of the public capital facilities necessary to support the rehabilitation and construction of residential and economic development within the City. On January 11, 2012, the City elected to become the Successor Agency for the former redevelopment agency per Assembly Bill 1X 26. See Note 14 of the notes to financial statements for more information on the Successor Agency of the Former Redevelopment Agency. Local Economy During Fiscal Year 2019/20, the City experienced a sharp and sudden economic shift towards the end of February 2020 due to the COVID-19 pandemic. There is little precedence for the current economic downturn since no recent economic experience works as a historical metaphor. However, moving into Fiscal Year 2020/21, the City is forecasting declines in many local revenue sources due to shutdowns and business closures. For instance, sales tax is predicted to decline to approximately the same levels as the Great Recession in 2008-2010. However, this most recent loss happened in a few short months rather than being spread out over a few years. In response to the local economic factors, the City has reduced staffing levels for full-time and part-time staff. The reductions are primarily in community -facing departments as State and County health guidelines do not allow facilities to operate at their full capacity or at all. Staffing levels are critically important for the City, as they are the biggest expenditure item in any local government and directly align with the City's services. The City has also reviewed infrastructure and major capital improvement projects and programs due to the current economic climate. Essential projects, such as maintenance and resurfacing of major streets and arterials, or those that provide long-term cost savings, such as drought -tolerant landscaping projects, are continuing. While other non- essential projects, such as maintenance on municipal facilities that cannot open in the current environment, have been reasonably deferred to conserve resources. Unfortunately, many local businesses are facing similar issues, and a reasonable conclusion is, the longer the current business closures and reduced operations continue, the greater the economic damage and other downstream impacts. To provide economic relief and support, the City distributed $1.8 million to impacted businesses and residents utilizing Federal Coronavirus Relief Funds distributed from the State. These funds will hopefully curb some of the consequences of the economic downturn for the businesses and residents that received funds. Budtetary Control The City adopts an annual budget where each department's budgeted appropriations are controlled at the character of expense level. These levels are defined as personnel services, operations and maintenance, capital outlay, debt service, cost allocation, and transfers out to other funds. Although the budget is monitored at the character of expense level, the legal level of budgetary control, that is, the level at which expenditures cannot exceed appropriations, is the fund level within the General Fund, Special Revenue, and Capital Projects Funds. The use of an encumbrance system further maintains budgetary control. Revenues are also estimated annually in the adoption of the annual budget. Revenues and expenditures are monitored throughout the year, with quarterly updates provided to the City Council. Long-term Financial Planning Annually, the City updates a five-year Capital Improvement Program (CIP). Planned capital expenditures for Fiscal Year 2020/21 total $31,893,010. Funds for these projects come from various sources, including development impact fees, State gasoline taxes, grant funds, and special assessments. Debt Administration The City of Rancho Cucamonga, as a general law city, is restricted from incurring general obligation bonded indebtedness that would exceed 3.75% of the total assessed valuation of all real and personal property. In Fiscal Year 2019/20, the City has $11.885 million in lease revenue bonds and $1.47 million in capital leases outstanding. The bonds were issued in January 2019 to build and connect over 50 miles of citywide conduit and fiber optic cabling under a five-year master plan, providing not only municipal broadband services but also connecting the City's core facilities and infrastructure. The project's capital costs will be recovered using revenue from municipal broadband customers managed by a private company to minimize operating overhead costs for the City. The capital leases were entered into in December 2018 to finance the acquisition of hardware equipment and software for the replacement of the City's data center infrastructure. II. HIGHLIGHTS OF FISCAL YEAR 2019/20 Economic and Community Development The Economic and Community Development Department continues to improve economic growth and quality of life in the community. The mission of Economic Development is to foster a strong local economy and create economic opportunities for investors and entrepreneurs, and to facilitate job growth. Economic Development staff, along with partners across the City, offer services and support to accomplish these goals and build a supportive economic ecosystem. During the past fiscal year, the City's business community was significantly impacted by the COVID-19 pandemic during the second half of the fiscal year. Industries such as food, beverage, and hospitality were impacted the most by the stay-at-home orders and non -essential business closures. These industries support a large part of the City's revenues, employment, and quality of life in the community. iv During the fiscal year, through the City's partnership with the Inland Empire Small Business Development Center (SBDC), the City provided one-on-one business consultation meetings to 75 business owners and entrepreneurs. As a result, five new jobs were created from these efforts. The City also hosted business workshops throughout the year lead by consultants from the SBDC. Due to COVID-19, the focus of the SBDC shifted to guiding businesses during their closure and assisted with various loan application submittals for the Payroll Protection Program. During the second half of the fiscal year, Community and Economic Development staff responded to the challenges posed by COVID-19 by creating a COVID-19 Response Team. The first task of this team was to create a policy that would enable restaurants to operate outdoors. The response was very successful and then translated to other industries such as gyms, churches, hair, and beauty. Additionally, the City received CARES Act funding to fund several relief programs to assist its residents and businesses. Some of these programs included grant funding to assist with outdoor operations, business and residential rental assistance, and matching grants for COVID -compliant businesses. The City continues to work with the San Bernardino County Transportation Authority (SBCTA) and Creative Housing Associates to develop ten acres of land adjacent to the Metrolink Station in Rancho Cucamonga. Recent private investments have, however, changed this area's focus from a transit -oriented development project to a multi - modal transit centric project. Recent developments include the potential of high-speed rail from Las Vegas stopping in Rancho Cucamonga along with an underground tunnel featuring self -driving shuttles connecting the Rancho Cucamonga Metrolink Station to the Ontario International Airport. On November 9, 2020, San Bernardino County's Local Agency Formation Commission (LAFCO) approved the annexation of approximately 4,085 acres from the County of San Bernardino to be incorporated into the City of Rancho Cucamonga. When the process of annexing the land began, the City embarked on a community -based planning process that became formally named the Etiwanda Heights Neighborhood and Conservation Plan, which communicates both the location of the planning area within the City and the intended purpose of the plan. The plan, which was adopted by the City Council in October 2019, lays out a comprehensive strategy for conserving 3,603 acres and the development of a 790-acre neighborhood. The vision in the plan was renewed after extensive participation and input from community members. The City engaged with over 200,000 people online and over 1,500 people through workshops, small -group meetings, and an open house. The annexation extends the City's boundaries by 6.3 square miles. Affordable Housing Affordable rental housing continues to be a demand in the community. In 2019 the City completed Villa Pacifica 11, a 40-unit project for seniors. The City is currently coming to the end of construction on a 140-unit senior affordable housing project. The project sponsor and developer are National CORE. It is anticipated that this project will be completed in fall of 2020 and provide much -needed housing for seniors. Another very important housing program administered by the Community and Economic Development staff is the City's Mobile Home Rental Assistance Program. This program provides up to $100 in assistance for space rental payments for mobile homeowners. The program operates in all eight mobile home parks located in the City and assists approximately 45 families. v As mentioned earlier, the City received funding from the CARES Act to provide funding for those impacted by COVID-19. The City developed an Emergency Rental Program that helped nearly 180 households in the community. The second phase of Emergency Rental Assistance begins in Fiscal Year 2020/21. These funds have been directed from CDBG funding, and it is estimated that 138 households will be assisted with those funds. Engineering Services The Engineering Department is led by the Engineering Services Director/City Engineer. It consists of four divisions: capital management; transportation development; environmental programs; and municipal utility. Capital management is responsible for the development and implementation of the City's capital improvement program, which includes the design, inspection, and contract administration of public improvement projects. A continued priority has been maintaining the Annual Comprehensive Capital Improvement Program document, which provides a five-year forecast of active capital project endeavors in the City. A total of ten Engineering Services Capital Improvement Projects amounting to just over $9 million were completed during Fiscal Year 2019/20. Capital projects completed during Fiscal Year 2019/20 include: • 6t' Street from Utica Avenue to the Resort Parkway Electric and Fiber Extension • Amethyst Avenue Street Improvement Project • Archibald Avenue Street Widening and Community Horse Trail Extension Project • Foothill Boulevard from Haven Avenue to Milliken Avenue Pavement Rehabilitation • Haven Avenue from Church Street to Base Line Road Pavement Rehabilitation • Hellman Avenue and 8th Street Railroad Crossing Improvements • Hermosa Avenue from Arrow Route to Foothill Boulevard Pavement Rehabilitation • Residential Smart Meter Replacement • Terra Vista Parkway and Spruce Avenue Safety Lighting Installation • Utica Avenue from 4' Street to 6tn Street Electric and Fiber Extension Capital projects anticipated for Fiscal Year 2020/21 include: • 4t' Street from Haven Avenue to Ontario Mills Drive Pavement Rehabilitation • Advance Traffic Management System Phase 2 (Design) • Advance Traffic Management System Phase I (Construction) • Base Line Road Utility Underground Project • Southwest Cucamonga Bike Trail Project • Day Creek Channel Bike Trail Project • Foothill Boulevard from Milliken Avenue to I-15 Freeway Pavement Rehabilitation • Heritage Park Bridge Replacement Project (Design) • School Crosswalk Improvements at Various Locations • Fiscal Year 2020/21 Traffic Signal Modification Projects vi Transportation development is staffed by a team of engineers and customer -oriented individuals. The division provides information, direction, and customer support to residents, business owners, developers, utility companies, other departments within the City, and the various school districts. This group is responsible for the review and conditioning of proposed development and utility work in the public right-of-way and on -site grading and technical plan check and permit issuance of these types of projects. Transportation development is also involved in the construction and operation of traffic control devices and plans for future traffic and transportation needs. Working closely with Public Works, the section ensures these traffic control devices are installed correctly per City, State, and Federal standards. Additionally, the section issues right- of-way permits, handles research requests, and explains Department policies to customers via email, phone, or public front counter. During Fiscal Year 2019/20, a combined total of 1,884 permits were issued. Environmental programs are responsible for administering the City's programs, which encourage preserving natural resources and preventing stormwater pollution, thereby ensuring compliance with State and Federal mandates. In Fiscal Year 2019/20, this division: • Provided service to 7,219 participants and processed 302,951 pounds of waste at the Household Hazardous Waste Collection Facility 0 Completed 870 stormwater inspections The Rancho Cucamonga Municipal Utility (the Utility) operates as a small electric utility providing electric service to commercial and residential developments in portions of the City. The Utility has over 1,700 metered customers and is continually growing as new development projects are completed. The Utility continues to embark on its mission to be a greener utility by utilizing renewable energy as part of its energy portfolio. The Utility operates, maintains, and constructs the City's fiber optic network infrastructure in key strategic areas, through a phased approach, to provide high-speed broadband to residents and businesses. The Utility oversaw the expansion of the City's Fiber Optic Master Plan in 2019 when it began providing fiber service to limited areas. Public Works Services The Public Works Services Department maintains the City's growing infrastructure of buildings, streets, storm drains, traffic signals, parks, and landscape improvements. The Department is headed up by the administration division, responsible for managing three divisions: facilities maintenance; streets, fleet, and storm drains maintenance; and parks and landscaping maintenance. The facilities maintenance division is responsible for the operation and maintenance of the 25 City -owned buildings. The division also provides technical assistance during the development of new buildings and parks and manages numerous capital maintenance projects. vii • LoanMart Field Lighting Repairs and Replacement — To maintain the Major League Baseball lighting standards for playability, the sports lights need to be changed out every two years. • Public Works Services Center Warehouse Expansion — The initial design for the Warehouse Expansion started in Fiscal Year 2017/18, with the Planning Commission's project approval in Fiscal Year 2019/20. However, the final construction has been deferred for several years pending the economic recovery from the impacts of COVID-19. • City Facilities Roof Maintenance and Repair — Repair and replacement work for the Lions Community Centers East and West roofs. • Facilities Work Order Management System — A new work order management system was implemented beginning in Fiscal Year 2018/19 to help manage work orders and gather the City's infrastructure data. Full deployment of this system continued into Fiscal Year 2019/20 and has since included all Fire District facilities into the system. • Victoria Gardens Cultural Center Celebration Hall Airwall Replacement — The airwall system that divides Celebration Hall into smaller meeting areas had failed on several occasions and was unable to be repaired. The full replacement of the airwall was completed in Fiscal Year 2019/20. The street maintenance division performs maintenance in various areas, including roadways, storm drains, traffic signs, markings, special events, traffic signal systems, and safety lighting. Additional functions include graffiti abatement, concrete repair, street sweeping, and 24/7 emergency response. This division also oversees fleet maintenance, vehicle and equipment specifications, and warehouse operations. FY 2019/20 accomplishments include: • Vehicle Purchases Purchased two Animal Care and Adoption Center trucks and one truck for the Parks and Landscape crew • Thermoplastic Program — Removed 2,609 square feet of old thermoplastic and paint, and applied various thermoplastic legends (stop, stop ahead, speed limit) and crosswalks at 30 locations and painted 9,283 linear feet of red curb adjacent to various schools, the Adult Sports Complex, and City Hall • Storm Drain Inspections and Cleaning — As required by the Clean Water Act, inspected 4,003 catch basins, and cleaned 404 catch basins and 6 drain lines were jetted • Citywide Concrete Repair Contract — Staff scheduled sidewalk and ADA ramp repairs in the Victoria Windrows area north of Base Line Road and west of Victoria Park Lane, along with other locations within Landscape Maintenance Districts Nos. 2 and 4R. In Fiscal Year 2020/21, the areas surrounding Banyan Street to Mandarin Avenue and Beryl Street to Carnelian Street are scheduled to be repaired. • Traffic Signal Battery Backup System (BBS) Replacement — This five-year project began in Fiscal Year 2018/19 and will continue through Fiscal Year 2022/23. The City's traffic signals network is 100% outfitted with the traffic signal BBS which provides power during a power outage by placing the intersection into a four-way red flash. Phase 2 was delayed in Fiscal Year 2019/20 due to vendors having inadequate inventory due to COVID-19, but it has recently restarted in Fiscal Year 2020/21. The parks and landscape maintenance division maintains over 400 landscaped sites and City parks, Adult Sports Complex and Epicenter, landscaped facilities, parkways, paseos and median islands, park facilities, citywide trails, and City -owned trees. • Park Turf Over -seeding — This program began in Fiscal Year 2018/19. It continued into Fiscal Year 2019/20 to encourage good turf health and sustainability during active use, drought conditions, and other environmentally related issues that impact turf health. This year several parks were overseeded in Landscape Maintenance Districts Nos. 2 and 4R, and CFD 2000-03. • Paseo Lighting Retrofits Over the last several years, the division focused on reducing utility expenditures and modernizing paseo, park, and landscape lighting. Through inspections, nine paseo locations in Landscape Maintenance District No. 2 were identified for repairs, upgrades, and modernization to improve the distribution of light, security, and lower utility costs. For Fiscal Year 2019/20, two of the nine locations were redesigned, creating a set of shelf -ready plans which can be implemented once funding is allocated. • Reforesting Project — A reforesting project was completed in Fiscal Year 2019/20 that allowed for removing and adding new trees in Landscape Maintenance District 6 and along the Pacific Electric Trail. This project will provide for a more diversified forest and addresses resident concerns. • Playground Area Surface Replacement — Annually, playground safety inspections of the equipment and rubberized surfaces are performed. Based on a comprehensive rubberized playground surface replacement list created during prior years, the rubberized surfaces at various parks throughout the City were replaced during Fiscal Year 2019/20. These improvements will extend the life of these play facilities and ensure a safe play environment for residents. Planning The Planning Department functions as the professional and technical advisor to the Planning and Historic Preservation Commission and the City Council on policy matters and issues concerning the physical development of the community. The Department focuses on proactive long-range planning to recognize and solve problems before they occur and take advantage of opportunities; to support City goals, objectives, policies, and programs; and to actively promote retail and commercial expansion by attracting new services to the City. The Department processed a wide variety of projects in Fiscal Year 2019/20: General Plan Update — In collaboration with all City departments and bringing the community together to discuss the future in order to update the City's General Plan. The community -based process will set a long- term vision and provide policy direction and guidance to residents, City staff, decision -makers, and the broader community. • Outdoor Operations — In response to the COVID-19 pandemic, the Department developed outdoor dining guidelines allowing businesses to continue operations by developing dining areas in parking lots. • Development Code Updates — The Department continues to update the City's Development Code to clarify standards and respond to changing land use conditions, as well as state legislation. Code updates for Accessory Dwelling Units and standards for entertainment permits, parking space dimensions, and drive aisle dimensions were approved during the Fiscal Year 2019/20. ix Building and Safety Services The Building and Safety Services Department provides application intake, plan review, inspection, and permit services for construction projects. Our goal is to support and encourage growth and improvement in the City while ensuring adherence to approved specifications and state and local codes. The Department continues to enhance its permit software's functionality, which is the foundation of the Department's online system. During Fiscal Year 2019/20, the Department conducted 14,000 inspections, received almost 2,000 electronic plan submissions, and issued over 4,600 permits. During Fiscal Year 2019/20, the Department increased its ability to interface and communicate using virtual technology. All plans and specifications are now uploaded electronically, allowing all corrections and communications to be centrally located and easily available within the permitting system. Approximately 20% of all building inspections are performed remotely. The Administrative Team strives to enhance communication with customers on many platforms, including website development, social media, educational videos, and constant updating of forms and educational literature. This team responds to all telephone calls for Building and Safety Services and Community Improvement. It uses a highly successful texting system called Quiq. The Quiq System allows the public to communicate quickly and efficiently regarding inspection schedules, clarifying needs and saving time. The Building Inspection Team provides building and fire inspections for all construction projects on private property. The team's highly knowledgeable inspectors are involved in industrial sites, commercial and retail projects, housing tracts and apartment complexes, and work involving mobile home parks. Additionally, the inspection team works closely with the Community Improvement Division, Fire Services, and law enforcement staff to abate properties and mitigate unsafe buildings in our City. The Permit Processing Team is involved in receiving applications and issuing thousands of permits each year. Providing customer service to help guide customers through the highly automated system to achieve their goals. This group is also instrumental in creating new and improved methods in supporting citizens and developers. The expert Plan Check Team review and approve thousands of projects annually. More than 16,000 applicants have registered in the permitting software. Also, the group performs a wildland interface with the Fire District to reduce the risk of structure fires in our very high fire severity hazard zone. Community Services The COVID-19 pandemic created unique impacts for the Community Services Department. Physical distancing guidelines and limitations on social gatherings directly impacted the core services the Department provides, such as senior services, recreation classes, theatre performances, youth sports, tiny tot programs, facility and park rentals, and special events. Addressing the impacts of COVID-19 provides an opportunity to evaluate all services for sustainability and cost -efficiency. Historically, the Community Services Department has operated programs through revenues based on user fees and subsidy from the General Fund to cover staff costs. The onset of restrictions due to COVID-19, which meant reductions in program and service delivery and therefore revenues, necessitated the x layoff of 230 part-time staff in March 2020, followed by the layoff of 9 full-time staff and elimination of 5 vacant full-time positions in May 2020. The causation from these reductions also led the way to merge operations into the General Fund, and the goal to maintain the current 50% program and services cost recovery model. Between March 2020 to June 2020, the Department focused on providing essential services to the community, specifically our Seniors, who are a part of the vulnerable population. Programs and services were altered to meet County, State, and CDC Guidelines while still meeting the needs of the community. The Senior Center stayed open to the community in order to: • Meals for Seniors the Department worked with the Family Service Association to provide five frozen meals a week with a Drive-Thru Meal Program. During Fiscal Year 2019/20, the Department served between 130 and 150 seniors weekly. The Department also organized, collected and distributed donations for seniors to ensure seniors had food and toiletries during the stay-at-home orders. • Community Commodities — An average of 130 packages of food were provided monthly to the community with a drive-thru model. • Central Park — Central Park remained open for residents to come in and use the restroom, Wi-fi, Tech Junction; and it provided a cool place for residents during a hot summer. Special events continue to be a staple in this community. The opportunity to engage with neighbors and friends in a fun, celebratory atmosphere is a highlight for Rancho Cucamonga residents. Prior to COVID-19, between July to February 2020, over 31,750 members of the community attended the major special events hosted by the Department. Events like 4t1i of July Fireworks Spectacular, Movies in the Park, Concerts in the Park, Spooktacular, Founders Day Community Parade and the Veterans Day Celebration. And, for the first time, the Concerts in the Park series included a very successful beer garden, hosted by local Rancho Cucamonga brewery, Hamilton Family Brewery. In addition to adding the beer garden, the series included an additional night for a six -week series of fun for our community. Event Services hosted 40 rentals between July 2019 and February 2020, with seven events being hosted in the Lewis Family Playhouse through the end of February. The theater even drew some interest from a Los Angeles based actor, Shawn Wayans, who used the Playhouse to launch his children's show "The Boo Crew." Shawn made an appearance during our I't Annual Chalk and Brews Festival, adding a level of notoriety to the event overall. Event Services at the Victoria Gardens Cultural Center continues to be progressive with its offerings to the clientele that aid in creating the ultimate in fun, safe, and memorable events. In September 2019, the Victoria Gardens Cultural Center hosted a new community event - the Chalk & Brews Festival, featuring chalk artists from around the Inland Empire as well as local craft breweries from as far as Los Angeles County. The event drew over 500 guests. Due to the pandemic, rentals were halted in early March. Fortunately, the majority of the Department's rentals that were unable to move forward due to restrictions have rescheduled to 2021. Due to the pandemic, Event Services became creative and resourceful by setting up a virtual meeting layout. Each socially distanced table and chair was partnered with their own microphone. A large projection screen and two video cameras ensured that all participants, both virtual and in -person, could be seen and heard. In June, a six -day virtual dance recital was held with over 1,000 participants. Team members were able to put the dance recital on stage safely and without incident. Using Celebration Hall as six classrooms and a very strategic path of travel, staff got the cast onto the stage without any xi cross over. Each room was sanitized between classes, the stage was sanitized between numbers, and all touch points were minimized and sanitized hourly. Police Department During Fiscal Year 2019/20, the Police Department's staffing included 141 sworn officers, 41 professional (civilian) employees, and more than 90 volunteers, including reserves, citizen patrol, equestrian patrol, and explorers. In addition to basic patrol services, the Rancho Cucamonga Police Department also provides School Resource Officers (6), Bicycle Enforcement Team, Multiple Enforcement Team (MET), Solution Oriented Policing team (S.O.P.), Traffic Division, Detective Bureau, Retail Theft Team (Victoria Gardens), Children and Family Services and Adult Protective Services (CFS/APS), Follow Up team, Crime Prevention team, TEST team, and Public Information Officer team. The Department of Behavioral Health was co -located within the station during the year to help citizens with mental health issues. The Triage Engagement and Support Team (TEST) program is grant -funded and focuses on crisis interventions and engagement. The goal is to strengthen the opportunity for recovery and wellness through intensive case management. A second TEST team member will be added during Fiscal Year 2020/21. The S.O.P. team continues to improve the quality of life issues with homelessness, address bar compliance, conduct Active Shooter training, and perform schoolfbusiness threat assessments. While engaging in their duties, S.O.P. Deputies work with Community Improvement personnel and the State's Department of Alcohol Beverage Control to ensure compliance for alcohol -serving businesses. As legislative changes create new policing challenges, the MET, S.O.P. team, and the Detective Bureau will continue to collaborate to prevent and deter criminal activity. The Police Department and Fire District jointly created an Active Shooter Training to help schools and the community prepare for such an event. However, the Department also implemented precautionary steps to improve safety. Utilizing School Resource Officers, the Department shows a uniformed presence at each of the four high schools and assists with middle and elementary schools' concerns. The Department continues to utilize Automated License Plate Reader (ALPR) and Public Safety Video Network (PSVN) technology to create policing efficiencies. Currently, the City has 12 patrol units and 24 separate intersections which are outfitted with the cameras. All captured plates are automatically processed through the law enforcement database. If the plate captured is a vehicle of interest, both dispatch and on -duty Deputies are notified immediately. The City has committed to investment in ALPR technology to deliver exceptional public safety services by locating and arresting criminals who would have previously traveled through our community undetected. In conjunction with ALPRs, the PSVN continues to expand and now has 232 video cameras throughout the City. The Victoria Gardens Regional Mall, Metrolink Station, Police Station, Epicenter, Archibald Library, Central Park, Los Amigos Park, and City Hall have been equipped with the system. Recent additions to the system include local schools. As the school districts implement their camera systems, they are joining the City's network to allow the Police Department to view events in real-time. There are currently 344 cameras operating within the school system. xii The S.O.P. team's key tasks involve investigating sex trade crimes, conducting Active Shooter trainings, and investigating and assisting with quality of life issues with the homeless. Through S.O.P., the Department collaborates with other departments to ensure business compliance with local regulations. Threat assessments for local businesses and schools prioritize the team to "harden the target" and alleviate the likelihood citizens will survive a mass casualty event. The K9 program continued to be beneficial to the City during Fiscal Year 2019/20. K9 Dare and her handler, Deputy Girard, continued to handle calls for service involving the tracking of missing persons and suspects within the City and assisted outside stations and agencies. K9 Smokey and his handler, Deputy Pedersen, were assigned temporary duty with the Jail Intelligence Team, which saw impressive results in curbing illegal narcotics distribution. Fire District The Rancho Cucamonga Fire Protection District is responsible for community risk reduction, emergency response, and emergency management and disaster resiliency. The District is dedicated to the preservation of life, property, and the environment. The continuous goal is to deliver these services in an effective, efficient, and professional manner. The District emphasizes a risk reduction strategy to better the community and implement life safety regulations designed to protect natural resources, secure the economic vitality of the community, and improve the quality of life for the citizens. The Prevention Bureau is charged with reducing preventable losses due to fire, hazardous materials releases, industrial incidents, and other unwanted and unplanned business interruptions. The Prevention Bureau also has responsibility for promoting safe and healthy living through continuous targeted and data -driven community outreach. The District's emergency response platform consists of seven paramedic -staffed engine companies and two paramedic -staffed ladder companies operating out of seven fire stations. As an "all -hazard" agency, crews are trained and equipped to mitigate various emergencies such as fire suppression, emergency medical services, hazmat, technical rescue, and tactical response. Resources can be strategically deployed throughout the City to respond to an emergency quickly and bring it under control. In Fiscal Year 2019/20, the Fire District responded to 16,399 incidents. The emergency management division is committed to preparing for, responding to, recovering from, and mitigating new and challenging emergencies and disasters that affect the entire community and surrounding region. Coordination with public and private community stakeholders reduces the impact of emergencies and disasters, increase community disaster resiliency, and provide timely economic recovery through comprehensive programs and plans. In the event of a major emergency, the Emergency Management Division supports the activation of the Emergency Operations Center (EOC). The EOC is designed to support the incident command post, collect and analyze data, maintain the organization's continuity, and disseminate those decisions to all concerned agencies and individuals. Emergency Management is responsible for coordinating training and exercises to prepare EOC staff to carry out their active EOC roles. During Fiscal Year 2019/20, District staff accomplished the following to maintain and improve existing services levels under City Council approved goals: • Public Safety Facility — Construction began on the new Public Safety Facility, which includes relocating the San Bernardino Road Fire Station (172) and a adding a fully functioning Rancho Cucamonga Police Department sub -station. Construction of the new Public Safety Facility is anticipated to be completed during Fiscal Year 2020/21. • Fire Station 178 — Initiated the design -build process for future Fire Station 178, located at Town Center Drive, east of Haven Avenue. This fire station is strategically located to provide emergency services to the center of the City and enhance the distribution of stations and support the corresponding demands for service. • Fire Station 179 — Began the negotiations to purchase land on 8th Street, east of Archibald Avenue, for future Fire Station 179. The purchase was finalized in August 2020. This fire station is strategically located to provide emergency services to the southwest section of the City and enhance distribution and support the corresponding demands for service. • Fire Inspection and Permit Fees — Continued waiving fire inspection and permit fees, saving our businesses money, enabling them to reinvest these dollars into their businesses and community. During Fiscal Year, waiving the fees assisted businesses as they navigated the initial phases of the COVID-19 pandemic. Library Services The Library Services Department experienced significant shifts in services during Fiscal Year 2019/20. The Library checked out approximately 661,200 books, DVDs, CDs, eBooks, and magazines, and issued nearly 7,000 new library cards. Over 40,000 people used a Library computer, and nearly 17,000 children attended a Library program. Currently, over 318,800 borrowers hold a Rancho Cucamonga Public Library Card and enjoy access to over 510,000 print and digital titles, and free access to more than 70 public computers. More than 16,000 of our young residents came to our libraries to enjoy the popular storytime programs with children's and teen services. With over twenty storytimes each week, our baby, toddler, pre-school, school -aged, and teen programs offered something for children of every age. And while the Summer Reading Program (SRP) took place virtually in Fiscal Year 2019/20, nearly 1,400 children and teens tracked more than 530,000 minutes online through the Library's program. The SRP is crucial to helping students maintain their reading skills during the summer months. The Library had many outreach visits in Fiscal Year 2019/20, including the Disabilities Resource and Safety Fair, RC Fire Open House, National Night Out, and RC Family Resource Center's Spooktacular event. When the COVID- 19 pandemic forced public facilities to limit in -person services, the Library began offering contactless Curbside Pickup Services at both library locations. More than 5,300 residents took advantage of this new service between March and June of 2020, generating an average of 14,300 holds a month. In a direct response to the increased demand for online content during the COVID-19 pandemic, the Library expanded access to downloadable resources in Fiscal Year 2019/20 by enhancing their CloudLibrary eBook/audiobook collection and adding a video and music streaming service called Hoopla. eBook/audiobook downloads have doubled during the pandemic averaging 7,000 downloads a month. In March 2020, the Library's xiv Integrated Library System (ILS) began offering residents the option to register for a library card online, obtaining instant access to all online content, including eBooks and streaming videos. Approximately 340 library cards are being created each month using the new online application form. City Management The City Manager is appointed by and serves at the pleasure of the City Council. Providing professional leadership, the City Manager's Office ensures City services, activities, and facilities meet the policy objectives formulated by the City Council. As part of these responsibilities, the City Manager's Office oversees various citywide and interdepartmental projects and efforts. One of those efforts is the Community Affairs Network (CAN), which provides and encourages meaningful communication that supports Team RC and connects our community. CAN strives to serve as the conduit for exceptional relationships, trusted information and meaningful engagement within Team RC and the diverse community we serve. CAN supports this mission and promotes the City's brand with the use of a variety of digital engagement and other communication tools such as: publication of the quarterly Rancho Reporter and the monthly eReporter; news releases; media relations, social media, website, RCTV-3, the City's Government Access Channel; City department eNewsletters, brochures, flyers, encouraging citywide initiative participation through community engagement; and provides messaging, media relations, and public relations counsel to City departments. During Fiscal Year 2019/20, Community Affairs led public information and outreach efforts for the COVID-19 pandemic. Communications included the development of a dedicated webpage, weekly community eMessage, weekly Mayor's video message and sharing of critical information on public health orders from the State and County of San Bernardino Department of Public Health. Additional efforts were necessary to facilitate community engagement for the General Plan Update, which included educational videos, several surveys, two rounds of virtual forums, and a virtual workshop, with additional engagement planned in Fiscal Year 2020/21. This engagement effort, although mostly virtual due to the COVID-19 pandemic, resulted in over 500,000 digital and in -person touchpoints with community members. In the City Manager's Office, the City has developed an innovative Healthy RC program. This program is unique in its holistic approach to encouraging residents, businesses, and our own organization to adopt healthy, active, and sustainable lifestyles and practices. This approach brings together both new and existing efforts of each City department with the goal of improving the quality of life in our community. In July 2019, Healthy RC distributed a survey to assess the quality of life in the City. Over 1,700 responses were received, providing insight into some of the community challenges, including access to mental health services, community connections, healthy living and active living, and the prevalence of health outcomes. The survey, which was translated into multiple languages, strengthens the City's understanding of our diverse community and helps to create strategies that will target health and quality of life programs to benefit the community. The City Manager's Office coordinates an active legislative program that focuses on protecting the interests of our community and identifies resources available to enhance City services and programs. Legislative efforts include researching and monitoring federal and state bills, preparing position papers and letters in response to the proposed xv legislation, and working with legislative representatives and their staff to promote the interests of the community at the state and federal level. This year, 67 bills were tracked during the Fiscal Year 2019/2020 Legislative Session, including 23 Assembly Bills (AB), 27 Senate Bills (SB), and 17 Federal bills. Position letters were sent to the State supporting 5 bills and opposing 6 bills. Position letters were also sent to Congress supporting 4 bills and opposing 1, with the City officially watching the remaining bills. The City Manager's Office takes the lead in developing and maintaining the City's data and performance measurement system. Through a comprehensive approach of purposeful interdepartmental engagement, each department has been able to successfully identify key performance indicators. This includes data directly related to their Strategic Services Plan, as well as other performance data for all areas of City operations such as community development, governance and finance, and health and sustainability. It is a critical initial step to the overall process of building foundational data management practices for the City as a whole. In its first year of implementation, the RC Data & Performance Measurements team is currently on track to successfully completing four quarterly reporting periods, with all departments being in participation. Each department continues to cultivate and develop its data and performance measurement system, helping the City gain valuable insights for its critical decision -making processes as it becomes a more data -informed government. Community Improvement The purpose of Community Improvement is to increase the stability and value of neighborhoods in the City through enforcement of the Municipal Code. Community Improvement Officers are tasked with determining a cause for a violation and identifying the most effective manner to gain compliance. This can include making a referral to public services and non -government organizations to assist those in the community that do not have the ability or funds to maintain the property. For property owners unwilling to comply, enforcement efforts can include administrative actions and civil remedies. Cost recovery has increased significantly with the establishment of abatement fees for services provided to remove the nuisance, hazardous, and illegal materials from private property. Increases in illegal cannabis cultivation have impacted law enforcement, drawing countless staff hours to investigate and document these occurrences, with the actual cost of abatement recovered through this process. During Fiscal Year 2019/20, Community Improvement successfully completed provisions of the Drug Abatement Act at two properties to abate criminal activity in residential neighborhoods. The Act allowed us to force the sale of the two properties, which had previously been the center of extensive drug activity in residential areas. This resulted in the prompt abatement of the drug activity and full cost recovery for all legal fees and all staff time related to enforcement and, additionally, funding for other drug abatement projects within the City. xvi City Clerk's Office/Records Management Department The City Clerk's Office/Records Management Department is responsible for accurately recording City Council/Fire District/Housing Successor Agency/Successor Agency/Authority proceedings; processing, updating, and safeguarding documents vital to the City's legislative process; providing research, information, and support to the City Council, City staff, and the general public; maintaining the citywide records management and document imaging programs; and administering open and free elections per statutory requirements. During Fiscal Year 2019/20, the City Clerk's Office/Records Management Department facilitated the Candidate Nomination Process for the November 3, 2020 Municipal Election for two seats on the City Council (District 1 & 4), including the candidate orientation, legal noticing requirements, agenda and staff reports, and campaign disclosure responsibilities. A new agenda automation system was implemented in Fiscal Year 2019/20 to help streamline the process of creating and publishing staff reports, agendas, agenda packets, and minutes for City Council meetings, including training to citywide staff on the new system and process. Additionally, the Department completed the biennial review and adoption of record retention schedules and notified City staff for more efficient handling and destruction of city records. A new records management manual involving records storage, retrieval, retention, and destruction was implemented during that review. Staff provided training on records management, including electronic scanning of documents, while ensuring compliance with applicable laws. Animal Care and Services The Animal Care and Services Department is responsible for nearly 5,000 homeless pets each year. The Department, which began operating in May 2006, has a mission of creating a PAWsitive impact by enriching animals' and people's lives. Core responsibilities include animal care, adoptions, community outreach and public safety. In Fiscal Year 2019/20, the Animal Center increased the number of volunteer foster homes to care for underage animals and animals recovering from medical procedures. The Animal Rescue Specialist also expanded the Department's network of rescue groups and shelter partnerships, including partnering with out-of-state pet adoption organizations. The objective of both programs is to increase the number of pets adopted. The Veterinary Division provides preventative and specialized care for the Center's homeless pets to help them get adopted. The Veterinary Division renewed its partnership with Western University College of Veterinary Medicine by hosting and mentoring third and fourth -year students. This win -win partnership offers veterinary students hands- on experience with shelter medicine, expanding their technical and case management skills. The program also gives Animal Services additional labor to offset the workload of caring for the animals. xvii Department of Innovation and Technoloay The Department of Innovation and Technology (DoIT) is focused on continually enhancing the value of the City's technology investments for internal customers and the community we serve. Over the course of the year, the Department has partnered on several projects in support of the Council's broader initiatives, including civic engagement, transparency in government, public safety, and cybersecurity. The Department of Innovation and Technology received several awards over the past year, including being recognized in the top ten cities for our population range in the 2020 Digital Cities Survey for the fourth year running. During Fiscal Year 2019/20, the Department completed the following key projects: • Updates to Enterprise Software — Several enterprise software platforms were updated during Fiscal Year 2019/20, including OneSolution Financials, Laserfiche document management, Chameleon Animal Center Management, and Accela Land Management. • Workstation Replacement — Completion of the user workstation replacement project, updating over 1,000 personal computer devices citywide to current Windows 10 operating system and right -sizing device deployments based on user needs. • Remote Work Security — Implementation of multi -factor authentication and network access controls to enhance security further and support remote work access. Finance Department The Finance Department is responsible for administering financial activities of the City such as payroll, accounts payable, accounts receivable, audits, preparation and monitoring of the budget, revenue recording and tracking, preparation of financial statements, and the establishment and maintenance of a fixed asset inventory. Finance is also responsible for business licensing, special district administration, and treasury management. The Finance Department applied for and received its 32" d consecutive Government Finance Officers Association (GFOA) Certificate of Achievement for Excellence in Financial Reporting (Certificate of Achievement). The Certificate of Achievement is an award designed to recognize and encourage excellence in state and local governments' financial reporting. It is the highest form of recognition in governmental accounting and financial reporting. Its attainment represents a significant accomplishment by a government and its management. The Department also applied for and received its 7th consecutive GFOA Distinguished Budget Presentation Award. The Business Licensing Division ensures compliance with City codes related to business licenses, transient occupancy tax (TOT), and admission taxes. During Fiscal Year 2019/20, staff processed approximately 11,660 business license applications (9,703 renewals and 1,957 new filings), inspected 348 businesses, and collected revenues totaling $3,010,218. The Division equipped staff with handheld ticket writers to better manage business license enforcement throughout the City. The ticket writers create a digital record and streamline the manual process of documenting and organizing their enforcement efforts through administrative citations. With respect to the pandemic, many businesses took advantage of the City's 120-day deferral of when penalties are assessed for non- payment of business licenses that was put into place in March 2020 through an Executive Order due to the COVID- 19 emergency. xviii The Accounting and Financial Reporting Division assisted with the tracking of various expenditures incurred as a result of the COVID-19 pandemic to facilitate the eventual reimbursement of eligible costs from FEMA (for the declared emergency) as well as the State (for the various CARES Act funding opportunities). These efforts will continue into Fiscal Year 2020/21 as the City continues to deal with the economic impacts of the pandemic. Human Resources Department The Human Resources Department is responsible for managing a broad range of employment -related services, including recruitment and selection, classification, compensation, employee development, and labor relations. The Department also provides risk management services, including worker's compensation and general liability, employee wellness, and safety. During Fiscal Year 2019/20, the Department's activities were shifted to compliance with COVID-19 guidelines, composing new policies and procedures to address and manage the workplace to ensure employees' safety. This included disseminating information and drafting various policies, including COVID-19 Pandemic Policy, Remote Work Program Policy, and the City's Volunteer Employee System (VEST), which allows healthy employees to take the COVID-19 test every 30 days pro -actively. Before COVID-19, the Department performed internal analysis on the recruitment workflow to establish a more efficient recruitment model improving time -to -fill for full-time positions and revising the City's Oral Board Rating form into a user-friendly version allowing a more fair and consistent rating process. Additionally, the Department continued the expansion of social media marketing to increase applicant engagement and improve recruitment efforts. Weekly activity posts on social media include Tip Tuesday, Wisdom Wednesday, Thursday Job posts, Feature Friday, and a new work culture video. Procurement Division The Procurement Division is responsible for procuring services and goods for the best value, at the lowest price, from the most responsive vendor. The Division acts as the City's centralized procurement agent and authorizes all City purchases by ordinance requirements. It is also charged with the disposition of surplus and obsolete property. The Division applied for and received the 2020 Achievement of Excellence in Procurement (AEP) award issued by the National Procurement Institute, Inc. The continuously evolving AEP criteria are measured by public procurement best practices. The Procurement Division is one of only 42 agencies in California and one of only 69 cities in the United States and Canada to receive the award. It is the twelfth consecutive year the Division has been the recipient of the prestigious AEP award. xix III. AWARDS AND ACKNOWLEDGEMENTS The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Rancho Cucamonga for its comprehensive annual financial report (CAFR) for the Fiscal Year ended June 30, 2019. The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government financial reports. To be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. The City of Rancho Cucamonga has received a Certificate of Achievement for the last thirty-two consecutive years. We believe that our current comprehensive annual report continues to meet the Certificate of Achievement Program's requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate. The preparation of this report could not have been accomplished without the efficient and dedicated service of the entire staff of the Finance Department. We appreciate and would like to commend all the City departments who assisted and contributed material to this document. We also recognize and would like to acknowledge the Mayor and members of the City Council for their interest, dedication, and constant support in planning and conducting the financial operations of the City in a responsible and progressive manner. Respectfully submitted, John R. Gillison City Manager Affwwb� & Tamara L. Oatman Finance Director xx CITY OF RANCHO CUCAMONGA CITY OFFICIALS JUNE 30, 2020 City Council L. Dennis Michael Lynne B. Kennedy Ryan A. Hutchison Kristine D. Scott Sam Spagnolo Mayor Mayor Pro Tern Council Member Council Member Council Member Administration and Department Heads City Manager John R. Gillison Deputy City Manager/Administrative Services Lori Sassoon Deputy City Manager/Cultural Services Elisa Cox Deputy City Manager/Economic and Community Development Matt Burris City Attorney James L. Markman Treasurer James Frost (retired June 30, 2020 City Clerk Janice C. Reynolds Animal Services Director Veronica Fincher Community Services Director Jennifer Hunt-Gracia City Clerk Services Director Linda Troyan Engineering Services Director/City Engineer Jason Welday Finance Director Tamara L. Oatman Fire Chief Ivan Rojer Human Resources Director Robert Neiuber Information Technology Director Darryl Polk Library Director Julie Sowles Police Chief Donny Mahoney Planning Director (hired August 2019) Anne McIntosh Public Works Services Director Bill Wittkopf xxi CITY OF RANCHO CUCAMONGA ORGANIZATION CHART Citizens of Rancho Cucamonga City Clerk I I City Council I I City Treasurer City Attornev City Manager Administrative Civic and Police Economic and Services Cultural Services Department Community Admin/Procurement Development Fire Finance Community Services District Animal Care Human Library and Services Resources Services Community Innovation and I Records Improvement Technology Management Building and I Engineering Planning I I I Public Works Safety Services Services Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Rancho Cucamonga California For its Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2019 Executive Director/CEO THIS PAGE INTENTIONALLY LEFT BLANK City of Rancho Cucamonga Comprehensive Annual Financial Report June 30, 2020 Financial Section THIS PAGE INTENTIONALLY LEFT BLANK LSUI@ iii ii• ii INDEPENDENT AUDITORS' REPORT To the Honorable Mayor and Members of the City Council City of Rancho Cucamonga, California Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Rancho Cucamonga, California, (the City) as of and for the year ended June 30, 2020, and the related notes to financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. PrimeGlobal 3rrrJenenJt%rr[dcwrrreGrS4 Pb� L L•••• .. To the Honorable Mayor and Members of the City Council City of Rancho Cucamonga, California Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Rancho Cucamonga, California, as of June 30, 2020, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis; the budgetary comparison schedules for the General Fund, Development Impact Fees, Lighting Districts, Housing Successor Agency and Fire District Funds; the schedule of changes in net pension liability and related ratios for the agent multiple -employer plan; the schedule of plan contributions for the agent multiple -employer plan; the schedule of proportionate share of the net pension liability for the cost sharing multiple -employer plans; the schedule of plan contributions for the cost sharing multiple -employer plans; the schedule of changes in net pension liability/(asset) and related ratios for PARS retirement enhancement plan; the schedule of plan contributions for PARS retirement enhancement plan; the schedule of changes in net OPEB liability/(asset) and related ratios; and the schedule of contributions — OPEB be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The introductory section, combining and individual nonmajor fund financial statements, budgetary schedules and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and schedules are fairly stated, in all material respects in relation to the basic financial statements as a whole. 2 L L•••• .. To the Honorable Mayor and Members of the City Council City of Rancho Cucamonga, California The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 10, 2020, on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. Brea, California December 10, 2020 3 THIS PAGE INTENTIONALLY LEFT BLANK Management's Discussion and Analysis This section of the Comprehensive Annual Financial Report of the City of Rancho Cucamonga (City) presents a narrative overview and discussion of the City's financial activities for the fiscal year ended June 30, 2020. This discussion and analysis should be read in conjunction with the basic financial statements and accompanying notes, which follow this section. We hope that the information and the discussions provide the readers with a clear picture of the City's overall financial condition. Financial Highlights • The assets and deferred outflows of resources of the City exceeded liabilities and deferred inflows of resources at the close of the fiscal year by $1,296,965,844, an increase of $19,839,453 for the current fiscal year. The total net position consisted of $823,366,332 as net investment in capital assets; $362,786,900 as restricted; and $110,812,612 as unrestricted. • Of the $19,839,453 total change in net position, governmental activities represented $14,886,444, and business -type activities represented $4,953,009. • As of June 30, 2020, the aggregate ending fund balance of the City's governmental funds was $500,586,465, an increase of $22,468,773 from the prior fiscal year. The combined fund balance consisted of $15,109,352 as nonspendable, $334,810,419 as restricted, $109,714,911 as committed, $45,850,943 as assigned, and a deficit $4,899,160 as unassigned. • At the end of the fiscal year, the General Fund reported a fund balance of $120,837,325, of which $14,898,477 was nonspendable, $12,720,339 was restricted, $68,240,058 was committed, and $24,978,451 was assigned. • The City's capital assets, net of accumulated depreciation and amortization, were $827,081,352, an increase of $2,778,191 from the prior fiscal year. The total capital assets, net of depreciation, for governmental activities represented $786,281,867, and for business -type activities represented $40,799,485. Overview of the Financial Statements This annual report consists of management's discussion and analysis (MD&A), basic financial statements, including the accompanying notes to financial statements, required supplementary information, and combining and individual fund statements and schedules for the nonmajor governmental and fiduciary funds. The basic financial statements are comprised of three components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to financial statements. Government -wide Financial Statements are designed to provide readers with a broad overview of the City's finances and are made up of the following two statements: the Statement of Net Position and the Statement of Activities. Both of these statements were prepared using accounting methods similar to those used by private -sector businesses, which are the economic resources measurement focus and the accrual basis of accounting. These statements are designed to provide information about the activities of the City as a whole and present a longer -term view of the City's finances. The Statement of Net Position presents information on all of the City's assets, liabilities, and deferred outflows/inflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the City's financial position is improving or deteriorating. 5 The Statement of Activities presents information showing how the City's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that result in cash flows in future fiscal periods, such as revenues pertaining to uncollected taxes, expenses pertaining to earned but unused compensated absences, and incurred but unpaid workers' compensation claims. Both of these government -wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a portion of their costs through user fees and charges (business -type activities). The governmental activities of the City include general government; public safety for police, fire, and animal center; community development; community services; and engineering and public works. The business - type activities of the City include the Municipal Utility, Fiber Optic Network, Sports Complex, and REGIS Connect. The government -wide financial statements reflect not only the activities of the City itself (known as the primary government), but also include the Rancho Cucamonga Public Improvement Corporation, the Rancho Cucamonga Fire Protection District, the Rancho Cucamonga Library, and the Rancho Cucamonga Public Financing Authority. Although legally separate, these entities are included as an integral part of the primary government because the City Council acts as the governing body for each entity and the sole purpose of each entity is to provide services entirely to and exclusively for the City. Fund Financial Statements are designed to report information about groupings of related accounts that are used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate finance - related legal compliance. The funds of the City are divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental funds financial statements focus on near -term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in determining what financial resources are available in the near future to finance the City's programs. The governmental funds financial statements are made up of the following: the Balance Sheet and the Statement of Revenues, Expenditures, and Changes in Fund Balances. Both of these statements were prepared using the current financial resources measurement focus and the modified accrual basis of accounting. The Budgetary Basis Statement of Revenues, Expenditures and Changes in Fund Balance is prepared on a modified cash basis of accounting that is different from Generally Accepted Accounting Principles (GAAP). Please see Note 1 of the Notes to Financial Statements for additional information on the basis difference. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental activities in the government - wide financial statements. By doing so, readers may better understand the long-term impact of the government's near -term financing decisions. Both the governmental funds balance sheet and the governmental funds statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. 0 The City maintains many individual governmental funds organized according to their type (general, special revenue, and capital projects funds). Information is presented separately in the governmental funds balance sheet and the governmental funds statement of revenues, expenditures, and changes in fund balances for the General Fund, as well as for the Development Impact Fees, Lighting Districts, Housing Successor Agency, and Fire District Special Revenue Funds, which are considered to be major funds. Information from the remaining governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements and schedules. Proprietary funds are generally used to account for services for which the City charges customers — either outside customers or other departments/funds of the City. The proprietary funds financial statements provide the same type of information as shown in the government -wide financial statements, only in more detail. The City maintains the following types of proprietary funds: • Enterprise funds are used to report the functions presented as business -type activities in the government -wide financial statements. The Municipal Utility and Fiber Optic Network enterprise funds are major funds. The Sports Complex and REGIS Connect enterprise funds are nonmajor enterprise funds. • Internal service funds are used to report the costs which are allocated internally amongst the City's functions. The City uses internal service funds to account for Equipment and Vehicle Replacement and Computer Equipment/Technology Replacement, which are presented as governmental activities in the government -wide financial statements. Fiduciary funds are used to account for resources held for the benefit of parties outside the City. The City's private -purpose trust fund, which reports on the activities of the Successor Agency of the Former Redevelopment Agency, and agency funds are reported under the fiduciary funds. Since the resources of these funds are not available to support the City's own programs, they are not reflected in the government - wide financial statements. The accounting used for fiduciary funds is much like that used for proprietary funds. Both are prepared using the economic resources measurement focus and the accrual basis of accounting. Agency funds do not have a measurement focus. Notes to Financial Statements provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. Required Supplementary Information, other than Management's Discussion and Analysis (MD&A), is presented concerning the budgetary comparison schedules for the City's General Fund and major special revenue funds. Also included in this section are the City's net pension and OPEB liabilities and contributions related to those plans. The Combining and Individual Fund Statements and Schedules provide information for nonmajor governmental funds and fiduciary funds and are presented immediately following the required supplementary information. 7 Government -wide Financial Analysis Analysis of Net Position: Net position may serve over time as a useful indicator of a government's financial position. The City's assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $1,296,965,844 at the close of the fiscal year. The following table is a condensed summary of the City's government -wide net position: Assets: Current and other assets Net OPEB asset Net pension asset Capital assets, net of depreciation Total assets Deferred outflows of resources Liabilities: Current and other liabilities Long-term net pension liabilities Long-term obligations outstanding Total liabilities Deferred inflows of resources Net position: Investment in capital assets Restricted Unrestricted Total net position Net Position June 30, 2020 and 2019 (In Thousands) Governmental Business -Type Activities Activities Total 2020 2019 2020 2019 2020 2019 $ 550,978 $ 526,218 $ 33,544 $ 34,204 $ 584,522 $ 560,422 4,702 21 - - 4,702 21 3,327 3,278 227 192 3,554 3,470 786,282 788,861 40,799 35,442 827,081 824,303 1,345,289 1,318,378 74,570 69,838 1,419,859 1,388,216 24,487 25,988 724 798 25,211 26,786 13,010 13,788 2,129 2,227 15,139 16,015 91,103 83,184 2,637 2,424 93,740 85,608 15,896 16,105 13,179 13,556 29,075 29,661 120,009 113,077 17,945 18,207 137,954 131,284 9,897 6,306 253 285 10,150 6,591 784,816 786,942 38,550 34,507 823,366 821,449 362,202 347,133 585 630 362,787 347,763 92,852 90,908 17,961 17,007 110,813 107,915 $ 1,239,870 $ 1,224,983 $ 57,096 $ 52,144 $ 1,296,966 $ 1,277,127 As of June 30, 2020, net investment in capital assets is reported as $823,366,332, which makes up 63.5% of the City's total net position. Net investment in capital assets reflects the City's investment in capital assets (e.g., land, infrastructure, building and improvements, vehicles and equipment) less any related outstanding debt used to acquire those assets. Compared to the prior fiscal year, net investment in capital assets increased by $1,917,629 or 0.2%. The City uses capital assets to provide services to its residents and businesses, and, therefore, these assets are not available for future spending. Furthermore, although the City's investment in capital assets is reported net of related debt, the resources to repay this debt must be provided from other sources since the capital assets themselves cannot be used to liquidate the debt. A portion of the City's net position has underlying restrictions on how it can be used. Restricted net position is reported as $362,786,900 or 28.0% of the City's total net position, which is an increase of $15,024,144 or 4.3% from the prior fiscal year. The increase in restricted net position generally is due to increases in the fund balances of special revenue funds in the governmental fund statements, such as the Development Impact Fees special revenue fund, which increased $6,337,673 from the prior fiscal year. The change in the Development Impact Fees special revenue fund is a major fund, and therefore, is analyzed in the governmental activities portion of the MD&A. The majority of the remaining increase is due to a $4,552,511 increase in the nonmajor Gas Tax special revenue fund resulting from the timing of capital projects. Projects were budgeted; however, as of June 30, 2020, the funds were mostly encumbered with actual expenditures to occur in the following fiscal year. The unrestricted net position of $110,812,612 can be used to meet the City's obligations for its governmental and business -type activities. The unrestricted net position makes up 8.5% of the City's total 0 net position and is an overall increase of $2,897,680 or 2.7% from the prior fiscal year. At $92,851,674, the governmental activities make up most of the total unrestricted net position, and the business -type activities make up the balance of $17,960,938. Other key changes in the statement of net position are as follows: • Capital assets are 58.3% of the City's total assets. In the current fiscal year, capital assets increased by $2,778,191, or 0.3%. However, the total net increase is comprised of a decrease in governmental activities of $2,579,478 offset by an increase in business -type activities of $5,357,669. These changes are further analyzed in the capital assets section of the MD&A. The City's current and other assets increased by $24,099,664 or 4.3%. However, the total net increase is comprised of a decrease in business -type activities of $660,093 offset by an increase in governmental activities of $24,759,757. The main cause for these changes involves fluctuations in cash and investments and restricted cash and investments. In the current fiscal year, governmental activities increased total cash and investments by $15,872,404 and restricted cash and investments for the pension rate stabilization program by $3,953,659. The business -type activities reported a decrease of $1,690,516 in cash held with fiscal agent due to reimbursement of capital project expenses concerning the fiber optic network expansion in the City. See Note 3 in the notes to financial statements for more information on cash and investments. • The governmental activities reported a net OPEB asset, which increased by $4,680,717 from the prior fiscal year. This increase is due to positive net investment income and favorable actual actuarial experiences compared to assumptions. See Note 13 in the notes to financial statements for more information on the City's other post -employment benefits. The City's current and other liabilities decreased by $876,247 or 5.5%. Governmental activities decreased by $778,614 due to the reduction of unearned revenues of $620,378 in the current fiscal year. Unearned revenues are recorded when receipts are taken before the service has been provided. As a result of the COVID-19 pandemic stay-at-home and physical distancing guidelines, the City needed to refund registration fees for recreation classes and facility rental deposits billed in advance of the event. The business -type activities reported a slight decrease of $97,633 due to timing of transactions —for example, the timing for the debt service payments for the 2019 Lease Revenue Bonds. Since bonds were issued in January 2019 and the first debt service payment was due in November 2019, there was a greater amount accrued as interest payable in the prior fiscal year, causing a decrease of accrued interest by $121,187. • The City's net pension liabilities increased by $8,131,286 or 9.5% from the prior fiscal year. This increase is due to increases of $4,765,582 with the City Miscellaneous Plan, $241,931 with the Fire District Miscellaneous Plan, and $3,123,773 with the Fire District Safety Plan. See Note 12 in the notes to financial statements for more information on the City's pension plan obligations. Analysis of Changes in Net Position: The following table presents condensed information showing how the City's net position changed during the most recent fiscal year. As previously stated, all changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. 9 Changes in Net Position Year Ended June 30, 2020 and 2019 (In Thousands) Governmental Business -Type Activities Activity Total 2020 2019 2020 2019 2020 2019 Revenues: Program Revenues: Charges for services $ 30,593 $ 34,206 $ 12,962 $ 13,426 $ 43,555 $ 47,632 Operating grants and contributions 12,063 10,962 - - 12,063 10,962 Capital grants and contributions 14,635 17,348 4,050 663 18,685 18,011 General Revenues: Property taxes 77,022 75,480 - - 77,022 75,480 Admissions tax 4 7 140 146 144 153 Transient occupancy taxes 3,511 4,054 - - 3,511 4,054 Sales taxes 29,480 32,803 29,480 32,803 Franchise taxes 8,579 8,000 8,579 8,000 Intergovernmental - Motor vehicle in -lieu 142 85 - - 142 85 Use of money and property 13,422 19,113 748 850 14,170 19,963 Other 6,217 7,764 - - 6,217 7,764 Gain on sale of capital asset - 58 - - - 58 Total Revenues 195,668 209,880 17,900 15,085 213,568 224,965 Expenses: General government 19,287 19,671 - 19,287 19,671 Public safety - police 41,859 40,690 - 41,859 40,690 Public safety - fire protection 42,714 37,964 - 42,714 37,964 Public safety - animal center 3,329 3,308 - 3,329 3,308 Community development 18,943 17,684 - 18,943 17,684 Community services 17,634 18,442 - 17,634 18,442 Engineering and public works 35,467 30,443 - 35,467 30,443 Interest on long-term debt 259 233 - - 259 233 Municipal Utility - - 10,642 9,408 10,642 9,408 Fiber Optic Network - 736 658 736 658 Sports Complex - 2,858 2,746 2,858 2,746 REGIS Connect - - - 19 - 19 Total Expenses 179,492 168,435 14,236 12,831 193,728 181,266 Excess of Revenues Over Expenses 16,176 41,445 3,664 2,254 19,840 43,699 Transfers (1,289) (381) 1,289 381 - - Special item - (36,407) - - - (36,407) Change in Net Position 14,887 4,657 4,953 2,635 19,840 7,292 Net Position at Beginning of Year 1,224,983 1,220,326 52,143 49,509 1,277,126 1,269,835 Net Position at End of Year $ 1,239,870 $ 1,224,983 $ 57,096 $ 52,144 $ 1,296,966 $ 1,277,127 10 Governmental Activities For the fiscal year ended June 30, 2020, total revenues from governmental activities were $195,666,979 while total expenses were $180,780,535. Of the $179,491,349 total functional expenses, 31.9% were directly funded by program revenues, and taxes and other general revenues funded the remaining 68.1 %. Program revenues are resources obtained from outside of the City and charges for services. They include, primarily, amounts received from those who purchase, use or directly benefit from a program or grants and contributions that are restricted to specific programs The following charts provide a snapshot of revenues from the City's governmental activities for the Fiscal Years 2019/20 and 2018/19, showing the primary revenue sources as percentages. Following the charts is an analysis of the changes in revenues from the prior fiscal year to the current fiscal year. Taxes 60.6% Taxes 57.3% Governmental Activities Fiscal Year 2019120 $195,666,979 Other General Use of Money and Revenues 3.2/o Property 6.9% Governmental Activities Fiscal Year 2018/19 $209,879,895 Other General Use of Money and Revenues Property 3.8% 9.1 Charges for Services 15.6% Operating tributions and Grants 6.2% butions and Grants 7.5% Charges for Services 16.3% Operating tributions and Grants 5.2% Aributions rants o/ 11 Revenues from taxes in the amount of $118,596,816 and charges for services in the amount of of $30,593,215 are the largest revenue sources for governmental activities. Taxes consist of property taxes, sales taxes, franchise taxes, transient occupancy taxes, and other taxes, the largest of which are property and sales taxes. The following table is a condensed summary of the City's governmental tax revenues for Fiscal Years 2019/20 and 2018/19: Property taxes Sales taxse Franchise taxes Transient occupancy taxes Othertaxes Total Taxes Governmental Activates Taxes 2020 2019 Amount Change $ 77,021,958 $ 75,479,699 $ 1,542,259 29,480,466 32,803,372 (3,322,906) 8,579,436 8,000,389 579,047 3,511,232 4,054,058 (542,826) 145,724 92,296 53,428 118,738,816 120,429,814 (1,690,998) Property taxes increased by $1,549,259 or 2.0% from the prior year due to steady growth in the assessed value of properties and additional parcels being added to the tax roll. Franchise taxes increased $579,047 or 7.2% from the prior year due to increased receipts from local utility providers, one of which had a fee increase half way through the fiscal year. However, due to the COVID-19 pandemic stay-at-home orders and business closures resulting from health and safety restrictions, sales and transient occupancy taxes decreased significantly from the prior year. Sales taxes decreased $3,322,906 or 10.1 % and transient occupancy taxes decreased $542,826 or 13.4%. The impacts on sales and transient occupancy taxes are expected to continue into the future so long as business closures are in effect as it reduces discretionary consumer spending and business/personal travel. Additionally, the brick -and -mortar store closures may accelerate more consumers to shopping online, causing more sales tax revenue to be directed to the San Bernardino County pool where it is allocated proportionately to the various cities in the county based on their respective share of total sales tax generated via point -of -sale. Charges for services decreased by $3,612,396 million or 10.6% from the prior fiscal year. This decrease is largely attributed to declines in community services programs and activities, which decreased by $957,423, and engineering and public works activities which decreased by $2,159,533. Community services revenues were adversely impacted by the COVID-19 pandemic stay-at-home and physical distancing orders, which virtually eliminated all recreational and community programs as of March 2020. The decline in engineering and public works revenues is related to development activity, such as development impact fees and plan check, planning, and engineering fees, which can be volatile depending on the local economy as well as on the phase that projects within the City are in during a fiscal year. The net decrease in capital grants and contributions of $2,713,457 or 15.6% consists of the following: • A net decrease in regional and local transportation fees of $3,655,908 for the Development Impact Fees special revenue fund due to less development activity generating these fees in the current fiscal year. • Offset by a net increase in contributed capital from developers of $530,093 and other various net changes in other development related revenues. 12 Use of money and property decreased $5,691,720 or 29.8% due to the following: A net decrease of $2,597,106 for the governmental activities for the temporary adjustment to bring investments to fair value at the end of the fiscal year. These changes are unrealized since no investments were actually sold. The gain on conveyance of land held for resale in the prior fiscal year in the Housing Successor Agency special revenue fund in the amount of $3,700,000 which was a nonrecurring transaction. Offset with a net increase of $775,170 in investment income earned during the fiscal year for the governmental activities. The following chart provides a snapshot of the City's governmental activities for Fiscal Years 2019/20 and 2018/19, showing the expenses by function. $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 Governmental Expenses By Function (In Thousands) General Public safety- Public safety- Public safety- Community Community Engineering Interest on Transfers government police fire protection animal center development services and public longaerm debt buacti hypp e works a ctiv it ie s ■June 30, 2020 $19287 $41:859 $42,714 $3,329 $18,943 $17:634 $35,467 $259 $1289 June 30, 2019 $19.671 $40.690 $37,964 $3,208 $17,684 $18.442 $30,443 $222 $381 The City's governmental activities expenses increased by $11,964,726 or 7.1% from the prior fiscal year. The total net increase was attributed to increases in public safety — police of $1,169,151, public safety — fire protection of $4,750,032, public safety — animal center of $21,311, community development of $1,258,471, and engineering and public works of $5,023,854. These increases were offset by decreases in general government of $384,322 and community services of $807,992. Interest on long-term debt increased by $25,716, and transfers to business -type activities increased by $908,505. 13 The following is a summary of the changes in governmental activities expenses: Public safety — police increased by $1,169,151 or 2.9% from the prior fiscal year, mainly due to increases in the public safety contract costs between the City and the San Bernardino County Sheriff Department. Public safety — fire protection increased by $4,750,032 or 12.5% from the prior fiscal year due to a combination of net increases, including $932,391 in pension expense for the miscellaneous and safety plans, $833,171 for depreciation expense, and $3,174,922 for functional expenses from salaries and benefits and the acquisition of noncapital equipment related to fire protection. The increases were offset by a net decrease of $623,247 in OPEB expense. During FY 2019/20, the Fire Board authorized the hiring of six Firefighters at midyear to increase staffing on two ladder truck companies. This additional staffing contributed to the increase in overall salaries and benefits. • Community development increased by $1,258,471 or 7.1% from the prior fiscal year due to net increases of $722,602 in allocated pension expenses for the City Miscellaneous Plan. • Engineering and public works increased by $5,023,854 or 16.5% from the prior fiscal year due to the net increases of $995,567 in allocated pension expense for the City Miscellaneous Plan and $3,507,748 for depreciation expense. • Community services decreased by $807,992 or 4.4% from the prior fiscal year due to net decreases in functional expenses from recreation and library services as a result of the the impacts of the COVID-19 pandemic. • Transfers to business -type activities increased by $908,505 or 238.7% from the prior fiscal year due to the General Fund transferring $939,603 to the Fiber Optic Network enterprise fund for debt service payments. Business -Type Activities The $19,189,226 combined revenues, including transfers from the governmental activities, of the City's business -type activities were $4,953,009 more than the expenses of $14,236,217. Since the proprietary funds provide the same information found in the government -wide statements, a more detailed discussion of the City's business -type activities is found in the financial analysis of the City's funds. Financial Analysis of the City's Funds As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. The following financial analysis is performed only for governmental and proprietary funds. The fiduciary funds are excluded from this analysis as they do not represent resources available to the City. Governmental Funds. The focus of the City's governmental funds is to provide information on near -term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular, assigned and unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. On June 30, 2020, the City's governmental funds reported combined fund balances of $500,586,465, an increase of $22,468,773 from the prior fiscal year. Of the total fund balance, $15,109,352 was nonspendable, associated with prepaid costs, deposits, and advances to other funds; $334,810,419 was classified as restricted for specific purposes; $109,714,911 was committed by the City Council; and $45,850,943 was assigned by the City Manager for certain uses and functions. The deficit of $4,899,160 unassigned fund balance gets eliminated with the receipt of future funds, except for the Lighting Districts 14 Fund special revenue fund, which is eliminated as repayment of the interfund advances occurs. See Note 6 in the notes to financial statements for more information on interfund advances. Governmental functions revenues totaled $188,940,724, while expenditures were $164,604,665. Other financing sources, such as transfers in from other funds and proceeds from the sale of capital assets, totaled $5,151,927 and other financing uses totaled $7,019,213 in the form of transfers out to other funds. The General Fund is the general operating fund of the City. On June 30, 2020, the General Fund reported a total fund balance of $120,837,325, consisting of $14,898,477 as nonspendable, $12,720,339 as restricted, $68,240,058 as committed, and $24,978,451 as assigned. More detailed information on these fund balance classifications can be found in Notes 1 and 16 in the notes to financial statements. The following table presents the summary of revenues and expenditures of the General Fund for Fiscal Years 2019/20 and 2018/19: Revenues and Other Financing Sources Revenues: Property taxes Sales taxes Transient occupancy taxes Franchise taxes Other taxes Licenses and permits Intergovernmental Charges for services Use of money and property Fines and forfeitures Contributions Miscellaneous Total Revenues Other Financing Sources: Transfers in Sale of capital assets Total Other Financing Sources Total Revenues and Other Financing Sources 2020 2019 % Change $ 29,813,457 $ 28,896,167 3.2% 29,480,466 32,803,372 -10.1% 3,511,232 4,054,058 -13.4% 7,065,844 6,657,152 6.1% 3,728 7,493 -50.2% 5,398,038 4,681,116 15.3% 711,951 595,600 19.5% 5,173,453 5,272,230 -1.9% 2,725,049 3,444,783 -20.9% 764,796 1,669,472 -54.2% 84,534 124,459 -32.1 % 3,443,205 4,493,260 -23.4% 88,175,753 92,699,162 -4.9% 3,861,606 1,811,950 113.1 % 75,954 59,417 27.8% 3,937,560 1,871,367 110.4% 92,113,313 94,570,529 -2.6% Expenditures and Other Financing Uses 2020 2019 % Change Expenditures: General government Public safety - police Public safety - animal center Communtiy development Communtiy services Engineering and public works Capital outlay Debt service - interest and fiscal charges Total Expenditures Other Financing Uses: Transfers Out $ 13,957,971 $ 15,345,248 -9.0% 40,850,910 39,703,690 2.9% 3,031,419 3,230,781 -6.2% 6,022,404 5,859,067 2.8% 4,401,161 4,739,454 -7.1 % 12,070,604 11,721,961 3.0% 5,317,991 5,747,055 -7.5% 9,196 - 100.0% 85,661,656 86,347,256 -0.8% 4,395,177 4,524,521 Total Expenditures and Other Financing Uses 90,056,833 90,871,777 -2.9% -0.9% 15 The following is a summary of the significant changes in General Fund revenues, expenditures, and other financing sources and uses: Taxes totaled $69,874,727 and accounted for 75.9% of the total revenues and other financing sources, but decreased by $2,543,515 from the prior fiscal year. As noted previously, property taxes have increased due to steady growth in the assessed value of properties, and franchise taxes increased due to increased usage by residents and businesses as well as some rate increases implemented by local utility providers. Furthermore, economy -sensitive revenues, such as sales and transient occupancy taxes, declined due to the impacts of the COVID-19 pandemic stay-at- home orders and business closures. • Licenses and permits increased by $716,922 or 15.3% due to development -related activities; however, these revenues are volatile since it depends on the timing and scope of development projects within the City in a given fiscal year. • Use of money and property decreased by $719,734 or 20.9% due to a temporary adjustment to bring investments to fair value at the end of the fiscal year. These changes are unrealized since no investments were actually sold. • Fines and forfeitures decreased significantly by $904,676 or 54.2% due to the suspension of new administrative and parking citations issued by the City and the suspension of the Franchise Tax Board's intercept program for overdue citations by the State as a result of the COVID-19 pandemic. • Miscellaneous income decreased by $1,050,055 or 23.4% primarily due to a reduction in the administrative allowance provided to the City for the wind -down activities of the Successor Agency of the Former Redevelopment Agency. The net decrease in the administrative allowance was $598,640 from the prior fiscal year. • Expenditures for the general government function reported a net decrease of $1,387,277 or 9.0% from the prior fiscal year. This change is due to a combination of net decreases, including $557,597 in operations and maintenance and contractual services, and a $378,340 increase in the allocation of central services departmental costs to other funds through the City's cost allocation plan. • Public safety — animal center decreased $199,632 or 6.2% from the prior fiscal year due to a $137,695 reduction in personnel costs due to a higher number of vacancies in the current year. • Community services decreased $338,293 or 7.1 % from the prior fiscal year due to reductions in personnel costs of $110,318 as well as in operations and maintenance and contractual services of $223,393. • Public safety - police increased $1,147,220 or 2.9% from the prior fiscal year due to increases in the public safety contract with the San Bernardino County Sheriff's Department. • Engineering and public works increased $348,643 or 3.0% from the prior fiscal year due to net increases of $379,013 for personnel costs and $192,360 for internal service fund user charges on vehicles. The Development Impact Fees Fund accounts for the receipts from development impact fee revenue used to defray all or a portion of the cost of public facilities as a result of development. The fund balance was $64,413,487, an increase of $8,595,973 or 15.4% from the prior fiscal year. Total revenues of $10,476,598 decreased by $5,248,997, and total expenditures of $1,880,625 decreased by $2,769,383 from the prior fiscal year. Although revenues exceeded expenditures in the current fiscal year, it is normal for the City to accumulate resources to complete identified capital projects over a period of time. 16 The Lighting Districts Fund accounts for the costs of providing street lighting throughout the City. The fund balance was a deficit of $4,886,654, which is an increase of $700,451 or 1.2% from the prior fiscal year. Total revenues of $2,419,794 consisted primarily of special assessments levied against the benefiting property owners, and total expenditures of $2,177,243 were primarily electrical utilities. Additionally, there were transfers in from the General Fund for $457,900 that partially support certain street lighting districts' operations. The Housing Successor Agency Fund accounts for the assets of the former Redevelopment Agency's Low and Moderate Income Housing Fund. The source of revenue in the fund is primarily the interest received from the notes and loans receivable. The fund balance was $139,693,495, a decrease of $239,549 or 0.1 % from the prior fiscal year. Total revenues of $224,607 were primarily from investment earnings and were offset by total expenditures of $464,156 for administration. The Fire District Fund accounts for the revenues received and disbursements made by the Rancho Cucamonga Fire Protection District while providing emergency and non -emergency services to the community. The fund balance was $80,342,988, which increased by $4,299,508 or 5.7% from the prior fiscal year. Total revenues were $46,311,374, which were predominantly generated by property taxes. Total expenditures of $41,959,313 were incurred to provide fire protection and suppression services, including $27,823,177 in personnel costs, which were the Fire District's largest expenditure. Additionally, the total expenditures included $6,514,800 of capital outlay expenditures for the new Public Safety Facility that will provide police and fire protection services to the west -side of the City when completed during Fiscal Year 2020/21. Proprietary Funds. The City's proprietary funds provide the same type of information as in the business - type activities column of the government -wide financial statements. They consist of four enterprise funds and two internal services funds. The Municipal Utility and Fiber Optic Network enterprise funds are considered to be major funds. The following table summarizes the operating results of the City's four enterprise funds: Business -type Activities Change in Net Position For the Fiscal Year Eneded June 30, 2020 and 2019 Nonmajor funds Municipal Utility Fiber Optic Network Sports Complex REGIS Connect 2020 2019 2020 2019 2020 2019 2020 2019 Operating revenues $12,389,983 $12,777,773 $ 86,646 $ 81,605 $ 479,896 $ 540,972 $ - $ 25,470 Operating expenses 10,641,764 9,407,567 294,863 454,979 2,838,486 2,725,911 270 19,284 Operating income (loss) 1,748,219 3,370,206 (208,217) (373,374) (2,358,590) (2,184,939) (270) 6,186 Net nonoperating revenues (expenses) 626,075 784,284 (315,321) (140,483) 121,692 127,332 - 1,105 Capital contributions 3,634,742 413,750 415,493 248,927 - - - - Transfers in - - 939,603 - 1,738,759 1,770,941 18,204 Transfers out (1,407,380) (1,390,260) - - - - - Change in net position $ 4,601,656 $ 3,177,980 $ 831,558 $ (264,930) $ (498,139) $ (286,666) $ 17,934 $ 7,291 17 Municipal Utilit The Municipal Utility Fund accounts for the costs of labor and materials used in the operation, maintenance, construction, and consumptions of electric services to certain residential, commercial, and industrial customers within the City. The operating revenues totaled $12,389,983, a slight decrease of $387,790 or 3.0% from the prior fiscal year. Receipts from sales and service charges decreased slightly by $386,024 from the prior fiscal year due to consumer usage changes. The total operating expenditures were $10,641,764, which is an increase of $1,234,197 or 13.1% from the prior fiscal year. The increase was primarily due to increases of $887,968 or 14.3% from the prior fiscal year in electricity costs that the Municipal Utility purchases to service its customers. Municipal Utility nonoperating revenues decreased by $158,209 due to less investment income received during the fiscal year and a slight reduction of $17,120 in the transfer out to the General Fund due to lower sales and services revenue. Capital contributions increased by $3,220,992 due to donated infrastructure from developers amounting to $3,370,352. Fiber Optic Network The Fiber Optic Network Fund accounts for receipts from user charges and leases for conduit and fiber access, and costs associated with the City's existing utility, information technology, and traffic fiber conduits. The operating revenues totaled $86,646, a slight increase of $5,041 or 6.2% from the prior fiscal year. The increase was due to lease revenues from a subscription agreement between the City and a local internet provider. These revenues have been committed as a revenue source for the repayment of the 2019 Lease Revenue Bonds, which provided bond proceeds to further expand the City's existing Fiber Optic Network. Operating expenses totaled $294,863 for the Fiber Optic Network, which is a decrease of $160,116 or 35.2% from the prior fiscal year. This decrease is due to bond issuance costs from the 2019 Lease Revenue Bonds in the prior fiscal year. Fiber Optic Network nonoperating revenues were exceeded by nonoperating expenses by $315,321. The nonoperating revenues consisted of interest revenue earned on unspent bond proceeds and miscellaneous income. Nonoperating expenses consisted of interest payments for the 2019 Lease Revenue Bonds. During the fiscal year, the General Fund transferred $939,603 to the fund for debt service on these bonds and has assigned $3,249,044 in fund balance to repay future debt service until lease revenues are projected to be sufficient. The fund reported $415,493 in contributed capital for infrastructure donated from developers. This infrastructure expanded the City's existing fiber optic network and provided high-speed internet access to new communities. These infrastructure assets have been placed into service in the current fiscal year. Other Proprietary Funds The Sports Complex and REGIS Connect enterprise funds were determined to be nonmajor for financial reporting purposes; however, these funds are reported individually on the statement of net position and statement of revenues, expenses and changes in fund net position of the proprietary funds in the basic financial statements. The Equipment and Vehicle Replacement and the Computer Equipment/Technology Replacement internal service funds are reported as a combined total on the statement of net position and statement of revenues, expenses and changes in fund net position of the proprietary funds. More detailed information on these funds can be found in the combining statement of net position and statement of revenues, expenses and changes in fund net position for the internal service funds. 18 General Fund Budgetary Highlights During the fiscal year, with the City's staff's recommendation, the City Council may revise the City's budget as needed. Adjustments were made periodically as additional appropriations were necessary to cover the cost of projects that either had required change orders for additional work or the estimated cost at the beginning of the project changed due to external factors. Adjustments were also made through increases or decreases to budgets to maintain the current level of services. For example, increased development activity may result in the need to utilize additional contract inspector services to handle the additional workload. All amendments that the City Council approves either increase or decrease appropriations. On June 30, 2020, General Fund actual revenues and other financing sources were higher than the final adjusted budget, while actual expenditures with encumbrances and other financing uses were lower than the final adjusted budget. The following table summarizes the operating results on a budgetary basis for the City's General Fund: Budgetary Operating Results - General Fund Fiscal Year Ended June 30, 2020 Variance with Final Budget Budgeted Amounts Positive Original Final Actual Amounts (Negative) Revenues and Other Financing Sources: Taxes $ 73, 689, 370 $ 69,140, 820 $ 69, 874, 727 $ 733,907 Licenses and permits 4,366,180 4,792,070 5,398,038 605,968 Intergovernmental 622,580 591,670 711,951 120,281 Charges for services 4,144,960 4,806,150 5,173,453 367,303 Use of money and property 1,671,870 2,181,040 2,725,049 544,009 Fines and forfeitures 1,495,680 1,041,620 764,796 (276,824) Contributions 125,160 124,000 84,534 (39,466) Miscellaneous 2,838,400 3,347,990 3,443,205 95,215 Transfers in 1,726,150 3,936,360 3,861,606 (74,754) Sale of capital assets 50,070 82,700 75,954 (6,746) Total Revenues and Other Financing Sources $ 90,730,420 $ 90,044,420 $ 92,113,313 $ 2,068,893 Expenditures with Encumbrances and Other Financing Uses: General government $ 15,601,060 $ 15,158,810 $ 14,120,498 $ (1,038,312) Public safety - police 42,913,360 43,205,330 40,951,248 (2,254,082) Public safety - animal center 3,416,210 3,138,810 3,031,419 (107,391) Community development 5,993,600 8,652,050 8,478,594 (173,456) Community services 5,562,050 4,730,520 4,401,161 (329,359) Engineering and public works 14,217,440 13,045,950 12,171,715 (874,235) Capital outlay 3,972,000 9,611,780 9,247,368 (364,412) Interest and fiscal charges 11,980 9,200 9,196 (4) Transfers out 4,726,720 4,526,870 4,395,177 (131,693) Total Expenditures with Encumbrances and Other Financing Uses $ 96,414,420 $ 102,079,320 $ 96,806,376 $ (5,272,944) Major revenue variances at the end of the fiscal year were as follows: • The total final budget for revenues and other financing sources was $686,000 less than the original budget. Overall, this decrease reflected decreases in taxes of $4,548,550 due to a conservative budgeting approach for sales and transient occupancy taxes resulting from the COVID-19 19 pandemic economic impacts. This decrease was largely offset by an increase of $2,210,210 for transfers to the General Fund; the most significant being the transfer from the nonmajor Recreation special revenue fund to combine recreational and community activities into the General Fund at the close of the fiscal year. • Total taxes were $733,907 better than the final budgeted amount of $69,140,820. Property taxes reported $200,713 lower than the final budget but were offset by sales and transient occupancy taxes reporting $927,438 higher than the final budget. The favorable sales and transient occupancy taxes were the results of conservative budgeting due to the COVID-19 pandemic economic impacts which, as previously mentioned, are down compared to the prior fiscal year. • Licenses and permits were $605,968 better than the final budgeted amount of $4,792,070 due to development related activities being more than expected. As previously mentioned, revenues from development -related activities can be volatile due to the scope and size of the development projects and services in a given fiscal year. • Use of money and property was $544,009 better than the final budgeted amount of $2,181,040 due to the temporary adjustment to bring investments to fair value at the end of the fiscal year. These changes are not budgeted because they do not provide useable resources for the City. • Fines and forfeitures were $276,824 below the final budgeted amount of $1,041,620. In March 2020, the City suspended the issuance of new parking and administrative citations to reduce additional financial burdens on its residents and business resulting from the COVID-19 pandemic. Additionally, the Franchise Tax Board suspended the intercept program, which collects outstanding parking and administrative citations. The suspension covered the period from April through July 2020. The City reduced the final budget by $454,060, but the actual results were still lower. Major expenditure variances at the end of the fiscal year are as follows: The total final budget for expenditures with encumbrances and other financing uses was $5,664,900 more than the original budget. During the fiscal year, the community development budgets increased by $2,658,450, mainly due to the General Plan update which got underway this fiscal year, and capital outlay increased $5,639,780 due to the budgeting of the police -portion of the Public Safety Facility. These increases were offset by engineering and public works, which decreased by $1,171,490 due to decreases in overall operations. • General government — general overhead was $633,956 better than the final budgeted amount of $3,540,770. This variance is due to $125,000 budgeted for an energy -efficient program to retrofit existing City facilities with energy -efficient equipment and $300,000 budgeted for an ADA transition plan, both of which did not start during Fiscal Year 2019/20. Both of these projects have been rebudgeted for Fiscal Year 2020/21. • Public safety — police was $2,254,082 better than the final budgeted amount of $43,205,330 due to the actual expenditures related to the public safety contract with the San Bernardino County Sheriff's Department being less than anticipated. However, the total expenditures for the public safety contract increased from the prior year. Capital Assets and Debt Administration Capital Assets The City's investment in capital assets for its governmental and business -type activities amounted to $827,081,352, net of accumulated depreciation and amortization. 20 The table below presents summary information on the City's capital assets. Capital Assets For the Year Ended June 30, 2020 and 2019 (Net of Depreciation, In Thousands) Governmental Business -Type Activities Activities Total 2020 2019 2020 2019 2020 2019 Land $ 98,139 $ 98,139 $ 5,451 $ 5,451 $ 103,590 $ 103,590 Right-of-way 237,013 237,013 - - 237,013 237,013 Construction in progress 17,020 11,407 4,994 1,696 22,014 13,103 Buildings improvements 144,737 151,797 5,594 6,025 150,331 157,822 Improvements other than buildings 24,522 25,533 2,233 2,362 26,755 27,895 Equipment and vehicles 12,076 13,380 153 170 12,229 13,550 Furniture and fixtures 230 363 - - 230 363 Infrastructure 252,109 250,549 22,374 19,738 274,483 270,287 Intangible 436 680 - - 436 680 Total $ 786,282 $ 788,861 $ 40,799 $ 35,442 $ 827,081 $ 824,303 Major capital asset activities during the year are as follows: Governmental Activities • Construction in progress increased by $13,398,599 during the current fiscal year due to significant progress being made on the new Public Safety Facility and the Etiwanda Avenue Grade Separation. The new Public Safety Facility includes the relocation of the San Bernardino Road Fire Station #172 and a new police substation to service the City's west side and amounted to $7.2 million in the current fiscal year. The Etiwanda Avenue Grade Separation provides an overcrossing for the SCRRA/BSNF track and improves traffic circulation and vehicle and rail safety in the area and amounted to $2.5 million in the current fiscal year. • Completed projects of $5,378,414 were transferred from construction in progress and placed into service. These projects included $611,831 for improvements other than buildings, $176,685 for equipment and vehicles, and $4,589,898 for infrastructure projects. Notable infrastructure projects included the capitalization of widening projects on Hellman Avenue and Archibald Avenue and pavement rehabilitation on Foothill Boulevard. • Total capitalized infrastructure assets amounted to $252,109,354 net of accumulated depreciation. During the current fiscal year, the City reported $3,177,702 in contributed capital assets, which were infrastructure assets donated from developers upon completing development projects. • The City reported $20,824,523 in depreciation expense. • The City reported $3,048,407 for disposals of equipment, vehicles, furniture and fixtures, infrastructure, and the deletion of construction in progress projects which were determined to no longer meet the criteria for a capital asset upon completion. Business -type Activities: • Construction in progress increased by $3,421,214 during the current fiscal year due to progress on the fiber optic network amounting to $1.9 million and various municipal utility line extensions amounting to $1.5 million. 21 • Completed projects of $123,708 were transferred from construction in progress and placed into service with the Municipal Utility enterprise fund. • The Municipal Utility and the Fiber Optic Network funds reported $3,370,352 and $415,493, respectively, in donated infrastructure. Additional information on the City's capital assets can be found in Note 5 of the notes to financial statements. Furthermore, significant commitments that include construction contracts are identified in Note 15 of the notes to financial statements. Debt Administration As of June 30, 2020, the City had $29,075,510 in debt outstanding, net of unamortized premiums and discounts, not including net pension liabilities. A summary of outstanding long-term debt with comparative amounts for the prior fiscal year is presented below: Long -Term Debt For the Year Ended June 30, 2020 and 2019 (In Thousands) Governmental Business -Type Activities Activities Total 2020 2019 2020 2019 2020 2019 Capital Leases (Note 7) $ 1,466 $ 1,919 $ - $ - $ 1,466 $ 1,919 Lease Revenue Bonds (Note 7) - - 13,179 13,556 13,179 13,556 Advances from Successor Agency (Note 8) 3,954 3,954 - - 3,954 3,954 Compensated Absences (Note 9) 7,755 7,138 - - 7,755 7,138 Claims and Judgments Payable (Note 14) 2,721 3,094 - - 2,721 3,094 Total $ 15,896 $ 16,105 $ 13,179 $ 13,556 $ 29,075 $ 29,661 Additional information on the long-term debt of the City can be found in various notes to the financial statements. A reference to the appropriate note is indicated in the table above. Economic Factors and Next Year's Budgets The City's Fiscal Year 2020/21 total adopted budget for all funds is $224,576,730. Of this amount, $137,783,550, or 61.4%, is appropriated for the City's operating budgets. The funds which make up the City's operating budget are the General Fund operating fund for $90,104,500, Fire District operating funds for $41,928,890, and the Library Fund for $5,750,160. The total budget decreased by $44,011,670 or 16.4%, and the operating budget increased by $6,577,670 or 5.0% from the Fiscal Year 2019/20 Adopted Budget. As a note, the presentation of the General Fund in the basic financial statements is the combination of the General Fund operating fund and other general funds. However, for budgetary purposes these other general funds are not included in the City's operating budget. 22 The General Fund operating fund budgeted receipts of $89,394,500, projecting an increase of $3,038,528 from the Fiscal Year 2019/20 actual receipts, as follows: FY 2019/20 FY 2019/20 FY 2020/21 Increase (Decrease) Budget Actuals Budget Amount Percentage Revenues and Other Financing Sources: Taxes $ 73,689,370 $ 69,874,727 $ 69,192,630 $ (682,097) -1.0% Licenses and permits 4,348,120 5,366,412 4,640,580 (725,832) -13.5% Intergovernmental 159,080 226,674 216,130 (10,544) -4.7% Charges for services 3,785,440 4,468,350 7,056,870 2,588,520 57.9% Use of money and property 410,330 674,742 1,809,650 1,134,908 168.2% Fines and forfeitures 1,249,420 704,739 1,025,320 320,581 45.5% Other 2,857,640 3,349,838 3,635,770 285,932 8.5% Transfers in 1,790,870 1,690,490 1,817,550 127,060 7.5% Total Revenues and Other Financing Sources $ 88,290,270 $ 86,355,972 $ 89,394,500 $ 3,038,528 3.5% The City uses a leading consultant in California for local government property and sales tax projections. Based on these projections, overall sales tax receipts are expected to decrease by $3.9 million or 11.9% from the Fiscal Year 2019/20 Adopted Budget. The significant decrease is due to the projected economic impacts of the COVID-19 pandemic. Property taxes are projected to increase modestly by $423,040 or 5.0% from the Fiscal Year 2019/20 Adopted Budget. The City is proactively monitoring these revenue sources as more information is available and update the City Council as appropriate. Another significant revenue source for the City is vehicle license fees (VLF and property tax in -lieu of VLF), franchise taxes, and transient occupancy taxes. VLF and franchise taxes are projected to increase $793,000 or 11.9% and $944,370 or 4.7%, respectively, from the Fiscal Year 2019/20 Adopted Budget. Transient occupancy taxes are projected to decrease by $2.8 million or 60.2% due to the projected continuing impacts of the COVID-19 pandemic, which has severely impacted occupancy rates as well as average daily rates in the City's various hotels. Charges for services are received for various departments throughout the City. In the prior years, the majority of charges for services revenue was derived from development -related fees. However, beginning in Fiscal Year 2020/21, the Community Services recreational and community activities have been combined with the General Fund; previously, they were accounted for in a separate special revenue fund. Despite physical distancing guidelines and restrictions on large gatherings and events, this revenue has remained unchanged from a budgetary perspective since the City is still in the process of determining what services might be offered as revised guidelines and plans are developed. These revenues and their directly -related expenditures are being reviewed quarterly to determine any adjustments needed to reflect actual services that the City can provide. Overall, these newly added revenues represent an increase of $2,860,690 to the General Fund and comprise approximately 39.5% of the total charges for services revenue budget. Other matters that are affecting or could affect the City's future operations are as follows: According to the California State Legislative Analyst Office's (LAO) The 2020-21 Budget: California's Fiscal Outlook Overview, the consensus among professional economists is that the U.S. economy should continue to grow, but at a slower pace than in recent years. However, there is an increased risk in the economic outlook compared to recent years. Specifically, weakening can be seen in data on housing markets, trade activity, new car sales, and business startup funding. Locally and in the regional economy, the forecasts show greater uncertainty. The LAO anecdotally indicates that the longer the current business closures continue, the greater the economic risk and damage to the economy resulting in permanent business closures and loss of financial security. In the City of Rancho Cucamonga, the sales tax forecasts reflect these anticipated impacts, which have decreased revenues to projections resembling the Great Recession of 2008-2010; however, these losses happened in a few months rather than spread out over several years. Furthermore, transient occupancy taxes are projected to be at levels comparable to Fiscal Year 2012/13 when the City had a third fewer hotels than today, translating to approximately eight years of revenue growth lost since March 2020. 23 Contacting the City's Financial Management This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general overview of the City of Rancho Cucamonga's finances and to show the City's accountability for the money it receives. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Finance Department at the City of Rancho Cucamonga, 10500 Civic Center Drive, Rancho Cucamonga, CA 91730. 24 CITY OF RANCHO CUCAMONGA STATEMENT OF NET POSITION JUNE 30, 2020 Assets: Cash and investments Receivables: Accounts, net of allowances Taxes Notes and loans Accrued interest Other loans Grants Internal balances Prepaid costs Deposits Net OPEB asset Net pension asset Restricted assets: Cash with fiscal agent Pension rate stabilization program Capital assets, not being depreciated Capital assets, net of depreciation Total Assets Deferred Outflows of Resources: Deferred OPEB related items Deferred pension related items Total Deferred Outflows of Resources Liabilities: Accounts payable Accrued liabilities Accrued interest Unearned revenue Deposits payable Due to other governments Noncurrent liabilities: Due within one year Long-term debt Compensated absences Claims and judgments Due in more than one year Long-term debt Advances from Successor Agency Compensated absences Claims and judgments Net pension liability Total Liabilities Deferred Inflows of Resources: Deferred OPEB related items Deferred pension related items Total Deferred Inflows of Resources Net Position: Net investment in capital assets Restricted for: Community development projects Public safety Parks and recreation Fire protection Engineering and public works Community services Capital projects Public benefit - Municipal Utility Unrestricted Total Net Position Primary Government Governmental Business -Type Activities Activities Total $ 344,317,739 $ 23,469,754 $ 367,787,493 9,479,769 7,736,450 165,614,870 1,073,804 1,475,352 725,141 2,649,173 1,031,349 35,000 4,701,758 3,326,774 4,237,149 12,602,434 352,171,489 434,110,378 1,345,288,629 1,632,391 70,000 73,787 (2,649,173) 16,798 227,278 10,930,137 10,444,867 30,354,618 74,570,457 11,112,160 7,736,450 165,684,870 1,147, 591 1,475, 352 725,141 1,048,147 35,000 4,701,758 3,554,052 15,167,286 12,602,434 362,616,356 464,464,996 1,419,859,086 454,699 - 454,699 24,031,828 723,762 24,755,590 24,486, 527 8,672,008 3,386,036 23,369 163,486 61,198 703,707 470,310 5,505,000 1,006,779 995,689 3,953,624 2,250,903 1,714,047 91,102,847 120,009,003 723,762 1,362,114 81,762 82,125 603,328 425,000 12,754,158 2,636,738 17,945,225 25,210,289 10,034,122 3,467,798 105,494 163,486 664,526 703,707 895,310 5,505,000 1,006,779 13,749,847 3,953,624 2,250,903 1,714,047 93,739,585 137,954,228 3,891,883 - 3,891,883 6,004,547 252,873 6,257,420 9,896,430 252,873 10,149,303 784,815,868 183,308,528 1,612,596 7,854,813 44,292,681 81,180,294 8,937,989 35,015,280 92,851,674 $ 1,239,869,723 38,550,464 584,719 17,960,938 $ 57,096,121 823, 366, 332 183, 308, 528 1,612,596 7,854,813 44,292,681 81,180,294 8,937,989 35, 015, 280 584,719 110,812,612 $ 1,296,965,844 See Notes to Financial Statements 25 CITY OF RANCHO CUCAMONGA STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2020 Program Revenues Operating Capital Charges for Contributions Contributions Expenses Services and Grants and Grants Functions/Programs Primary Government: Governmental Activities: General government $ 19,286,640 $ 8,984,984 $ 27,540 $ Public safety - police 41,858,815 778,374 565,370 Public safety - fire protection 42,713,637 330,210 26,835 Public safety - animal center 3,329,047 186,283 - - Community development 18,942,599 11,391,312 711,090 79,423 Community services 17,634,143 2,302,821 480,625 - Engineering and public works 35,467,833 6,619,231 10,251,076 14,554,547 Interest on long-term debt 258,635 - - - Total Governmental Activities 179,491,349 30,593,215 12,062,536 14,633,970 Business -Type Activities Municipal Utility 10,641,764 12,389,983 3,634,742 Fiber Optic Network 736,499 91,596 415,493 Sports Complex 2,857,684 479,896 - REGIS Connect 270 - - Total Business -Type Activities 14,236,217 12,961,475 - 4,050,235 Total Primary Government $ 193,727,566 $ 43,554,690 $ 12,062,536 $ 18,684,205 General Revenues: Taxes: Property taxes, levied for general purpose Admissions tax Transient occupancy taxes Sales taxes Franchise taxes Motor vehicle in lieu - unrestricted Use of money and property Other Transfers Total General Revenues, Special Item and Transfers Change in Net Position Net Position at Beginning of Year Net Position at End of Year See Notes to Financial Statements 26 Net (Expenses) Revenues and Changes in Net Position Primary Government Governmental Business -Type A L: AFL:..:L:�� $ (10,274,116) $ $ (10,274,116) (40,515,071) (40,515,071) (42,356,592) (42,356,592) (3,142,764) (3,142,764) (6,760,774) (6,760,774) (14,850,697) (14,850,697) (4,042,979) (4,042,979) (258,635) (258,635) (122,201,628) - (122,201,628) 5,382,961 5,382,961 (229,410) (229,410) (2,377,788) (2,377,788) (270) (270) 2,7759493 2,775,493 (122,201,628) 297759493 (119,426,135) 77,021,958 - 77,021,958 3,728 140,277 144,005 3,511,232 - 3,511,232 29,480,466 29,480,466 8,579,436 8,579,436 141,996 - 141,996 13,421,654 748,053 14,169,707 6,216,788 - 6,216,788 (1,289,186) 1,289,186 - 137,088,072 291779516 139,265,588 14,886,444 4,953,009 19,839,453 1,224,983,279 52,143,112 1,277,126,391 $ 1,239,869,723 $ 5790969121 $ 192969965,844 See Notes to Financial Statements 27 CITY OF RANCHO CUCAMONGA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2020 Special Revenue Funds Housing Development Lighting Successor General Impact Fees Districts Agency Assets: Cash and investments $ 93,629,309 $ 64,101,262 $ 6,692,123 $ 2,249,201 Receivables: Accounts, net of allowances 1,385,717 358,693 224,035 339,437 Taxes 6,297,202 - 24,896 - Notes - - - 165,614,870 Accrued interest 273,036 186,418 20,000 7,257 Other loans - - - - Grants - - - Prepaid costs 312,787 300 3,372 Deposits 20,000 - - Due from other funds 4,521,864 12,874 3,308 Advances to other funds 14,565,690 - - Restricted assets: Cash and investments with fiscal agents - 3,523,238 Pension rate stabilization program 3,233,569 - - - Total Assets $ 124,239,174 $ 64,659,547 $ 6,961,054 $ 171,740,683 Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable $ 1,970,883 $ 234,893 $ 146,725 $ Accrued liabilities 1,394,545 11,167 4,084 Unearned revenues - - 15,838 Deposits payable 36,421 - Due to other governments - Due to other funds - Advances from other funds - - 11,501,310 Total Liabilities 3,401,849 246,060 11,667,957 - Deferred Inflows of Resources: Unavailable revenues - - 179,751 32,047,188 Total Deferred Inflows of Resources - - 179,751 32,047,188 Fund Balances: Nonspendable 14,898,477 300 - 3,372 Restricted 12,720,339 64,413,187 139,690,123 Committed 68,240,058 - - Assigned 24,978,451 Unassigned - - (4,886,654) - Total Fund Balances 120,837,325 64,413,487 (4,886,654) 139,693,495 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 124,239,174 $ 64,659,547 $ 6,961,054 $ 171,740,683 See Notes to Financial Statements 28 CITY OF RANCHO CUCAMONGA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2020 Assets: Cash and investments Receivables: Accounts, net of allowances Taxes Notes Accrued interest Other loans Grants Prepaid costs Deposits Due from other funds Advances to other funds Restricted assets: Cash and investments with fiscal agents Pension rate stabilization program Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable Accrued liabilities Unearned revenues Deposits payable Due to other governments Due to other funds Advances from other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund Balances: Nonspendable Restricted Committed Assigned Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources, and Fund Balances Special Other Total Governmental Governmental $ 73,481,654 $ 99,967,977 $ 340,121,526 1,047,106 6,095,761 9,450,749 281,866 1,132,486 7,736,450 - - 165,614,870 280,909 291,957 1,059,577 - 1,475,352 1,475,352 - 725,141 725,141 203,218 3,985 523,662 - 15,000 35,000 - 21,208 4,559,254 - - 14,565,690 - 713,911 4,237,149 $ 84,663,618 $ 110,442,778 $ 562,706,854 $ 1,131,578 $ 5,123,043 $ 8,607,122 1,594,190 382,050 3,386,036 - 147,648 163,486 - 24,777 61,198 - 703,707 703,707 378,105 3,379,599 3,757,704 1,216,757 - 12,718,067 4,320,630 9,760,824 29,397,320 - 496,130 32,723,069 - 496,130 32,723,069 203,218 3,985 15,109,352 17,792,425 100,194,345 334,810,419 41,474,853 - 109,714,911 20,872,492 45,850,943 - (12,506) (4,899,160) 80,342,988 100,185,824 500,586,465 $ 84,663,618 $ 110,442,778 $ 562,706,854 See Notes to Financial Statements 29 THIS PAGE INTENTIONALLY LEFT BLANK 30 CITY OF RANCHO CUCAMONGA RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION JUNE 30, 2020 Fund balances of governmental funds $ 500,586,465 Amounts reported for governmental activities in the statement of net position are different because: Capital assets net of depreciation have not been included as financial resources in governmental fund activity. 779,848,772 Deferred outflows related to pension related items are not included in the governmental fund activity: Contributions made after the measurement date $ 11,211,829 Adjustment due to differences in proportions 1,365,482 Changes in assumptions 5,820,019 Differences between expected and actual experiences 5,634,499 24,031,828 Deferred inflows related to pension related items are not included in the governmental fund activity: Changes in assumptions (1,585,870) Net difference between projected and actual earning on plan investments (1,599,851) Differences between expected and actual experiences (1,954,926) Adjustment due to differences in proportions (10,735) Differences between actual contributions and the proportionate share of contributions (853,165) (6,004,547) Deferred outflows related to OPEB related items are not included in the governmental fund activity: Contributions made after the measurement date 454,699 454,699 Deferred inflows related to OPEB related items are not included in the governmental fund activity: Changes in assumptions (209,521) Differences between expected and actual experiences (3,409,527) Net difference between projected and actual earning on plan investments (272,835) (3,891,883) Advances from Successor Agency of the Former RDA, compensated absences and claims and judgments liability are not included in the governmental fund activity: Advances from Successor Agency of the Former RDA (3,953,624) Claims and judgments (2,720,826) Compensated absences (7,755,903) (14,430,353) Governmental funds report all pension contributions as expenditures, however, in the statement of net position, the excess of the total pension liability over the plan fiduciary net position is reported as a net pension liability. (91,102,847) Net pension assets are not available to pay for current -period expenditures and therefore are not reported in the govenmental funds. 3,326,774 Net OPEB assets are not available to pay for current -period expenditures and therefore are not reported in the govenmental funds. 4,701,758 Revenues reported as unavailable revenue in the governmental funds and recognized in the statement of activities. These are included in the intergovernmental revenues in the governmental fund activity. 32,723,069 Internal service funds are used by management to charge the costs of certain activities, such as equipment management, to individual funds. The assets and liabilities of the internal service funds are added to the statement of net position. 9,625,988 Net Position of Governmental Activities $ 1,239,869,723 See Notes to Financial Statements 31 CITY OF RANCHO CUCAMONGA STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2020 Special Revenue Funds Housing Development Lighting Successor General Impact Fees Districts Agency Revenues: Taxes $ 69,874,727 $ $ 2,105,600 $ Licenses and permits 5,398,038 - Intergovernmental 711,951 296,647 Charges for services 5,173,453 297,865 - Use of money and property 2,725,049 1,619,353 159,961 129,136 Fines and forfeitures 764,796 - - - Contributions 84,534 - Developer participation - 8,262,733 - - Miscellaneous 3,443,205 - 154,233 95,471 Total Revenues 88,175,753 10,476,598 2,419,794 224,607 Expenditures: Current: General government 13,957,971 - 1,937,875 Public safety - police 40,850,910 224 - Public safety - fire protection - - Public safety - animal center 3,031,419 168 - Community development 6,022,404 115,518 464,156 Community services 4,401,161 14,130 - Engineering and public works 12,070,604 587,303 - Capital outlay 5,317,991 1,163,282 120,378 Debt service: Interest and fiscal charges 9,196 - 118,990 - Total Expenditures 85,661,656 1,880,625 2,177,243 464,156 Excess (Deficiency) of Revenues Over (Under) Expenditures 2,514,097 8,595,973 242,551 (239,549) Other Financing Sources (Uses): Transfers in 3,861,606 - 457,900 Transfers out (4,395,177) - Sale of capital assets 75,954 - Total Other Financing Sources (Uses) (457,617) - 457,900 - Net Change in Fund Balances 2,056,480 8,595,973 700,451 (239,549) Fund Balances: Beginning of year 118,780,845 55,817,514 (5,587,105) 139,933,044 End of Year $ 120,837,325 $ 64,413,487 $ (4,886,654) $ 139,693,495 See Notes to Financial Statements 32 CITY OF RANCHO CUCAMONGA STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2020 Revenues: Taxes Licenses and permits Intergovernmental Charges for services Use of money and property Fines and forfeitures Contributions Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety - police Public safety - fire protection Public safety - animal center Community development Community services Engineering and public works Capital outlay Debt service: Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Sale of capital assets Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances: Beginning of year End of Year Special Other Total Governmental Governmental Fire District Funds Funds $ 42,496,886 $ 17,437,126 $ 131,914,339 6,516 192,833 5,597,387 14,000 16, 243, 019 17, 265, 617 684 2,089,048 7,561,050 2,369,252 3,422,604 10,425,355 194,207 - 959,003 - 347,501 432,035 - 136,290 8,399,023 1,229,829 1,464,177 6,386,915 46,311,374 41,332,598 188,940,724 - 1,043,209 16,939,055 - 259,146 41,110,280 35,381,317 84,357 35,465,674 - - 3,031,587 11,215,726 17,817,804 7,421,955 11,837,246 - 4,794,327 17,452,234 6,514,800 7,642,952 20,759,403 63,196 - 191,382 41,959,313 32,461,672 164,604,665 4,352,061 8,870,926 24,336,059 29,665 703,526 5,052,697 (105,494) (2,518,542) (7,019,213) 23,276 99,230 (52,553) (1,815,016) (1,867,286) 4,299,508 7,055,910 22,468,773 76,043,480 93,129,914 478,117,692 $ 80,342,988 $ 100,185,824 $ 500,586,465 See Notes to Financial Statements 33 THIS PAGE INTENTIONALLY LEFT BLANK 34 CITY OF RANCHO CUCAMONGA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2020 Net change in fund balances - total governmental funds Amounts reported for governmental activities in the statement of activities are different because: 22,468,773 Governmental funds report capital outlays as expenditures. However, in the statement of activities, the costs of those assets are allocated over their estimated useful lives as depreciation expense. Capital outlay $ 17,114,557 Depreciation (19,018,376) Contributed capital assets 3,663,181 Loss on disposal of capital assets (3,048,407) (1,289,045) The issuance of long-term debt provides current financial resources to governmental funds, while repayment of principal of long-term debt consumes current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Change in claims and judgments payable 372,818 Compensated absences expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. (617,273) OPEB obligation expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. 562,326 Pension obligation expenses are expenditures in the governmental funds, but reduce the Net Pension Liability/(Asset) in the statement of net position. (8,843,494) Revenues reported as unavailable revenue in the governmental funds are recognized in the statement of activities. These are included in the intergovernmental revenues in the governmental fund activity. 2,948,514 Internal service funds are used by management to charge the costs of certain activities, such as equipment management, to individual funds. The assets and liabilities of the internal service funds are added to the statement of net position. (716,175) Change in Net Position of Governmental Activities $ 14,886,444 See Notes to Financial Statements 35 CITY OF RANCHO CUCAMONGA STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30, 2020 Assets: Current: Cash and investments Receivables: Accounts Notes and loans Accrued interest Prepaid costs Due from other funds Net pension asset Restricted: Cash with fiscal agent Total Current Assets Noncurrent: Capital assets - net of accumulated depreciation Total Noncurrent Assets Total Assets Deferred Outflows of Resources: Deferred pension related items Total Deferred Outflows of Resources Total Assets and Deferred Outflows of Resources Liabilities, Deferred Inflows of Resources and Net Position: Liabilities: Current: Accounts payable Accrued liabilities Accrued interest Deposits payable Due to other funds Capital leases Revenue bonds Total Current Liabilities Noncurrent: Advances from other funds Capital leases Revenue bonds Net pension liability Total Noncurrent Liabilities Total Liabilities Deferred Inflows of Resources: Deferred pension related items Total Deferred Inflows of Resources Net Position: Net investment in capital assets Restricted for public benefit - Municipal Utility Unrestricted Total Net Position Total Liabilities, Deferred Inflows of Resources and Net Position Business -Type Activities - Enterprise Funds Major Funds Other Enterprise Funds Municipal Fiber Optic Sports REGIS Utility Network Complex Connect $ 23,325,138 $ - $ 144,616 $ 1,553,017 69,794 9,580 - 70,000 - - - 73,787 - - 16,798 - - 9,151 - - - 82,532 - 144,746 - - 10,930,137 - - 25,130,423 10,999,931 298,942 18,640,350 8,881,572 13,277,563 18,640,350 8,881,572 13,277,563 43,770,773 19,881,503 13,576,505 - 223,204 500,558 - 223,204 - 500,558 - $ 43,993,977 $ 19,881,503 $ 14,077,063 $ - $ 1,165,240 $ 153,074 $ 43,800 $ - 31,188 - 50,574 - - 82,125 - - 603,328 - - - 810,701 - - 425,000 - - 1,799,756 1,470,900 94,374 - - - 1,847,623 - - 12,754,158 - - 794,138 - 1,842,600 - 794,138 12,754,158 3,690,223 - 2,593,894 14,225,058 3,784,597 - 84,876 - 167,997 - 84,876 - 167,997 - 18,640,350 6,632,551 13,277,563 - 584,719 - - - 22,090,138 (976,106) (3,153,094) 41,315,207 5,656,445 10,124,469 - $ 43,993,977 $ 19,881,503 $ 14,077,063 $ See Notes to Financial Statements 36 CITY OF RANCHO CUCAMONGA STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30, 2020 Assets: Current: Cash and investments Receivables: Accounts Notes and loans Accrued interest Prepaid costs Due from other funds Net pension asset Restricted: Cash with fiscal agent Total Current Assets Noncurrent: Capital assets - net of accumulated depreciation Total Noncurrent Assets Total Assets Deferred Outflows of Resources: Deferred pension related items Total Deferred Outflows of Resources Total Assets and Deferred Outflows of Resources Liabilities, Deferred Inflows of Resources and Net Position: Liabilities: Current: Accounts payable Accrued liabilities Accrued interest Deposits payable Due to other funds Capital leases Revenue bonds Total Current Liabilities Noncurrent: Advances from other funds Capital leases Revenue bonds Net pension liability Total Noncurrent Liabilities Total Liabilities Deferred Inflows of Resources: Deferred pension related items Total Deferred Inflows of Resources Net Position: Net investment in capital assets Restricted for public benefit - Municipal Utility Unrestricted Total Net Position Total Liabilities, Deferred Inflows of Resources and Net Position Governmental Activities - Internal Total Service Funds $ 23,469,754 $ 4,196,213 1,632,391 29,020 70,000 - 73,787 14,227 16,798 507,687 9,151 - 227,278 10,930,137 - 36,429,296 4,747,147 40,799,485 6,433,095 40,799,485 6,433,095 77, 228, 781 11,180, 242 723,762 - 723,762 - $ 77,952,543 $ 11,180,242 $ 1,362,114 $ 64,886 81,762 - 82,125 23,369 603,328 - 810, 701 - - 470,310 425,000 3,365,030 558,565 1,847,623 - - 995,689 12,754,158 - 2,636,738 - 17,238,519 995,689 20,603,549 1,554,254 252,873 - 252,873 - 38,550,464 4,967,096 584,719 - 17,960,938 4,658,892 57,096,121 9,625,988 $ 77,952,543 $ 11,1809242 See Notes to Financial Statements 37 CITY OF RANCHO CUCAMONGA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2020 Business -Type Activities - Enterprise Funds Major Funds Other Enterprise Funds Municipal Fiber Optic Sports REGIS Utility Network Complex Connect Operating Revenues: Sales and service charges $ 12,389,983 $ 86,646 $ 162,829 $ - Interdepartmental charges - - - - Rent - - 272,663 - Miscellaneous - - 44,404 - Total Operating Revenues 12,389,983 86,646 479,896 - Operating Expenses: Salaries and benefits 744,619 - 1,638,714 - Maintenance and operations 7,933,951 125,372 375,045 270 Contractual services 837,827 5,500 264,695 - Depreciation expense 1,125,367 163,991 560,032 - Total Operating Expenses 10,641,764 294,863 2,838,486 270 Operating Income (Loss) 1,748,219 (208,217) (2,358,590) (270) Nonoperating Revenues (Expenses): Admissions tax - - 140,277 - Interest revenue 626,075 121,365 613 - Interest expense - (441,636) (19,198) - Miscellaneous - 4,950 - Total Nonoperating Revenues (Expenses) 626,075 (315,321) 121,692 - Income (Loss) Before Contributions and Transfers 2,374,294 (523,538) (2,236,898) (270) Capital contributions 3,634,742 415,493 - - Transfers in - 939,603 1,738,759 18,204 Transfers out (1,407,380) - - - Changes in Net Position 4,601,656 831,558 (498,139) 17,934 Net Position: Beginning of Year 36,713,551 4,824,887 10,622,608 (17,934) Changes in Net Position 4,601,656 831,558 (498,139) 17,934 End of Fiscal Year $ 41,315,207 $ 5,656,445 $ 10,124,469 $ - See Notes to Financial Statements 38 CITY OF RANCHO CUCAMONGA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2020 Operating Revenues: Sales and service charges Interdepartmental charges Rent Miscellaneous Total Operating Revenues Operating Expenses: Salaries and benefits Maintenance and operations Contractual services Depreciation expense Total Operating Expenses Operating Income (Loss) Nonoperating Revenues (Expenses): Admissions tax Interest revenue Interest expense Miscellaneous Total Nonoperating Revenues(Expenses) Income (Loss) Before Contributions and Transfers Capital contributions Transfers in Transfers out Changes in Net Position Net Position: Beginning of Year Changes in Net Position End of Fiscal Year Governmental Activities - Internal Total Service Funds $ 12,639,458 $ - 1,114,190 272,663 - 44,404 44,564 12,956, 525 1,158,754 2,383,333 - 8,434,638 548,318 1,108,022 245,101 1,849,390 1,806,147 13,775,383 2,599,566 (818,858) (1,440,812) 140,277 - 748,053 114,560 (460,834) (67,253) 4,950 432,446 47,307 (386,412) (1,393,505) 4,050,235 - 2,696,566 677,330 (1,407, 380) - 4,953,009 (716,175) 52,143,112 10, 342,163 4,953,009 (716,175) $ 57,096,121 $ 9,625,988 See Notes to Financial Statements 39 CITY OF RANCHO CUCAMONGA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2020 Business -Type Activities - Enterprise Funds Major Funds Other Enterprise Funds Municipal Fiber Optic Sports REGIS Utility Network Complex Connect Cash Flows from Operating Activities: Cash received from customers and users $ 12,447,828 $ 27,341 $ 523,272 $ 11,520 Cash received from interfund service provided - - - - Cash paid to suppliers for goods and services (8,723,614) (225,545) (661,556) (29,724) Cash paid to employees for services (645,609) (1,527,575) - Cash received from others - - - Net Cash Provided (Used) by Operating Activities Cash Flows from Non -Capital Financing Activities: Cash transfers in Cash transfers out Cash received from other funds Cash paid from other funds Admissions tax received Net Cash Provided (Used) by Non -Capital Financing Activities Cash Flows from Capital and Related Financing Activities: Acquisition and construction of capital assets Principal paid on capital debt Interest paid on capital debt Interest paid on interfund financing Net Cash Provided (Used) by Capital and Related Financing Activities Cash Flows from Investing Activities: Interest received Net Cash Provided (Used) by Investing Activities Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at End of Year 3,078,605 (198,204) (1,665,859) (18,204) - 939,603 1,738,759 18,204 (1,407,380) - - - - 299,445 - - - - (123,361) - 140,277 (1,407,380) 1,239,048 1,755,675 18,204 (1,243,702) (1,913,122) - (310,000) - - (629,603) - (19,198) (1,243,702) (2,852,725) (19,198) 631,064 121,365 613 - 631,064 121,365 613 - 1,058,587 (1,690,516) 71,231 22,266,551 12,620,653 73,385 $ 23,325,138 $ 10,930,137 $ 144,616 $ See Notes to Financial Statements 40 CITY OF RANCHO CUCAMONGA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2020 Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities: Operating income (loss) Adjustments to Reconcile Operating Income (loss) Net Cash Provided (Used) by Operating Activities: Depreciation (Increase) decrease in accounts receivable (Increase) decrease in deferred outflows from pensions (Increase) decrease in notes and loans receivable (Increase) decrease in prepaid cost (Increase) decrease in net pension asset Increase (decrease) in accounts payable Increase (decrease) in accrued liabilities Increase(decrease)in unearned revenues Increase (decrease) in deposits payable Increase (decrease) in net pension liability Increase (decrease) in deferred inflows from pensions Total Adjustments Net Cash Provided (Used) by Operating Activities Non -Cash Investing, Capital, and Financing Activities: Donated infrastructure Business -Type Activities - Enterprise Funds Major Funds Other Enterprise Funds Municipal Fiber Optic Sports REGIS Utility Network Complex Connect $ 1,748,219 $ (208,217) $ (2,358,590) $ (270) 1,125,367 163,991 560,032 - (64,693) (59,305) 47,002 11,520 18,068 - 56,249 - 35,000 - - - (16,798) - - - (13,656) - (21,911) - 64,962 (94,673) (21,816) (29,454) 4,885 (13,716) - - (3,626) 87,538 - - 96,230 116,360 (6,517) - (25,843) 1,330,386 10,013 692,731 (17,934) $ 3,078,605 $ (198,204) $ (1,665,859) $ (18,204) $ 3,370,352 $ 415,493 $ - $ See Notes to Financial Statements 41 CITY OF RANCHO CUCAMONGA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2020 Cash Flows from Operating Activities: Cash received from customers and users Cash received from interfund service provided Cash paid to suppliers for goods and services Cash paid to employees for services Cash received from others Net Cash Provided (Used) by Operating Activities Cash Flows from Non -Capital Financing Activities: Cash transfers in Cash transfers out Cash received from other funds Cash paid from other funds Admissions tax received Net Cash Provided (Used) by Non -Capital Financing Activities Cash Flows from Capital and Related Financing Activities: Acquisition and construction of capital assets Principal paid on capital debt Interest paid on capital debt Interest paid on interfund financing Net Cash Provided (Used) by Capital and Related Financing Activities Cash Flows from Investing Activities: Interest received Net Cash Provided (Used) by Investing Activities Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at End of Year Governmental Activities - Internal $ 13,009,961 $ - 1,114,190 (9,640,439) (965,944) (2,173,184) - 44,564 1,196,338 192,810 2,696,566 677,330 (1,407,380) - 299,445 (123,361) 140,277 1,605,547 677,330 (3,156,824) (515,714) (310,000) (453,174) (629,603) (74,156) (19,198) (4,115,625) (1,043,044) 753,042 110,942 753,042 110,942 (560,698) (61,962) 34,960,589 4,258,175 $ 34,399,891 $ 4,196,213 See Notes to Financial Statements 42 CITY OF RANCHO CUCAMONGA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2020 Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities: Operating income (loss) Adjustments to Reconcile Operating Income (loss) Net Cash Provided (Used) by Operating Activities: Depreciation (Increase) decrease in accounts receivable (Increase) decrease in deferred outflows from pensions (Increase) decrease in notes and loans receivable (Increase) decrease in prepaid cost (Increase) decrease in net pension asset Increase (decrease) in accounts payable Increase (decrease) in accrued liabilities Increase(decrease)in unearned revenues Increase (decrease) in deposits payable Increase (decrease) in net pension liability Increase (decrease) in deferred inflows from pensions Total Adjustments Net Cash Provided (Used) by Operating Activities Non -Cash Investing, Capital, and Financing Activities: Donated infrastructure Governmental Activities - Internal Total Service Funds $ (818,858) $ (1,440,812) 1,849,390 1,806,147 (65,476) - 74,317 35,000 - (16,798) 140,684 (35,567) - (80,981) (313,209) (8,831) (3,626) 87,538 212,590 (32,360) - 2,015,196 1,633,622 $ 1,196,338 $ 192,810 $ 3,785,845 $ See Notes to Financial Statements 43 CITY OF RANCHO CUCAMONGA STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS JUNE 30, 2020 Assets: Cash and investments Receivables: Accounts Taxes Accrued interest Developer loans Prepaid bond insurance Advances to City Restricted assets: Cash and investments with fiscal agents Total Assets Deferred Outflows of Resources: Deferred charge on refunding Total Deferred Outflows of Resources Liabilities: Accounts payable Accrued liabilities Accrued interest Deposits payable Payable to trustee Due to external parties/other agencies Long-term liabilities: Due in one year Due in more than one year Total Liabilities Deferred Inflows of Resources: Deferred charges on refunding Total Deferred Inflows or Resources Net Position: Held in trust for other purposes Total Net Position Private - Purpose Trust Fund Successor Agency Agency of the $ 24,868,914 $ 22,814,098 79,730 - 123,306 36,268 - - 10,550,742 - 1,364,671 - 3,953,624 4,043,445 8,026 $ 29,151,663 38,691,161 $ 118,341 19,239 9,074,645 19,871,655 67,783 $ 29,151,663 2,250,754 4,366,741 13,199, 379 284,310,274 1,660,347 1,660,347 (245,028,706) $ (245,028,706) See Notes to Financial Statements 44 CITY OF RANCHO CUCAMONGA STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS YEAR ENDED JUNE 30, 2020 Additions: Taxes Interest and change in fair value of investments Other revenue Total Additions Deductions: Contractual services Interest expense Contributions to City Total Deductions Changes in Net Position Net Position: Beginning of year Net Position - End of the Year Private - Purpose Trust Fund Successor Agency of the Former RDA $ 27,643,720 39,844 181,664 27,865,228 954,488 11,804,312 250,000 13,008,800 14,856,428 (259,885,134) $ (245,028,706) See Notes to Financial Statements 45 THIS PAGE INTENTIONALLY LEFT BLANK 46 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2020 I. SIGNIFICANT ACCOUNTING POLICIES Note 1: Organization and Summary of Significant Accounting Policies a. Description of Entity The City of Rancho Cucamonga was incorporated on November 30, 1977, under the laws of the State of California and enjoys all the rights and privileges applicable to a General Law City. The City operates under a council-manager form of government and provides its citizens with a full range of municipal services. It is governed by an elected five -member board. As required by accounting principles generally accepted in the United States of America, these financial statements present the City of Rancho Cucamonga (the City) and its component units, entities for which the City is considered financially accountable. The inclusion of an organization within the scope of the reporting entity of the City of Rancho Cucamonga is based on the provisions of GASB Statement No. 14 and amended with GASB Statement No. 61. The blended component units discussed below, although legally separate entities, are in substance part of the government operation and so data from these component units has been combined herein. The following criteria were used in the determination of the blended component units: 1. The members of the City Council also act as the governing body of the Rancho Cucamonga Public Improvement Corporation (the Improvement Corporation), the Rancho Cucamonga Fire Protection District (the Fire District), the Rancho Cucamonga Library (the Library), and the Rancho Cucamonga Public Financing Authority (the Financing Authority). 2. The Improvement Corporation, the Fire District, the Library, and the Financing Authority are managed by employees of the City. A portion of the City's general overhead costs is allocated to the Fire District and the Library. 3. The City, the Improvement Corporation, the Fire District, the Library, and the Financing Authority are financially interdependent. They provide financial benefit/burden to the City. Blended Component Units The Improvement Corporation was incorporated on November 14, 1988, under the Non -Profit Public Benefit Corporation Law of the State of California. The Improvement Corporation was established for charitable purposes including rendering financial assistance to the City by financing, acquiring, constructing, improving and leasing public improvements for the benefit of residents of the City and the surrounding area. Separate financial statements are not available for the Improvement Corporation. The Fire District (formerly, Foothill Fire Protection District) was a special district formed by the County of San Bernardino for the purpose of fire suppression within its boundaries. Effective July 1, 1989, operations of this district were taken over by the City. The Fire District still operates as a separate special district; however, now it is under the control of the City instead of the County of San Bernardino. Separate financial statements are available for the Fire District. 47 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 1: Organization and Summary of Significant Accounting Policies (Continued) The Library was part of the San Bernardino County Library System in which the City participated. Effective July 1, 1994, and pursuant to California Code Section 19104, the City withdrew from the County Library System. As of this date, the Library operates as a separate entity under the control of the City. Separate financial statements are not available for the Library. The Financing Authority was established on April 21, 1999, pursuant to Article I (commencing with Section 6500) of Chapter 5 of Division 7 of Title I of the California Government Code. Its purpose is to facilitate the financing and the refinancing of construction, expansion, upgrading and improvement of the public capital facilities necessary to support the rehabilitation and construction of residential and economic development within the City. Separate financial statements are not available for the Financing Authority. b. Government -Wide and Fund Financial Statements The government -wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. The effect of interfund activity has been removed from these statements, except for the interfund services provided and used. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include: 1) charges to customers or applicants who purchase, use or directly benefit from goods, services or privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government -wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. c. Measurement Focus, Basis of Accounting and Financial Statement Presentation The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. 48 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 1: Organization and Summary of Significant Accounting Policies (Continued) Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period, except for sales tax and grant revenue where the government considers revenue to be available if collected within 180 days of the end of the current fiscal period. The primary revenue sources, which have been susceptible to accrual by the City, are real and personal property tax, other local taxes, franchise fees, forfeitures and penalties, motor license fees, rents and concessions, interest revenue, and state and Federal grants and subventions. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. The City's fiduciary funds consist of agency funds and a private purpose trust fund. Agency funds are used to account for situations where the government's role is purely custodial. All assets reported in an agency fund are offset by a liability to the party on whose behalf they are held. Agency funds have no measurement focus. Private purpose trust funds are accounted for using the "economic resources" measurement focus and the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. The City reports the following major governmental funds: • The General Fund is the general operating fund of the City. All general tax receipts and fee revenue not allocated by law, Council policy or contractual agreement to other funds are accounted for in the General Fund. General Fund expenditures include operations traditionally associated with activities which are not required to be accounted for or paid by another fund. • The Development Impact Fees Fund accounts for the receipts from development impact fees which are used to defray all or a portion of the cost of public facilities as a result of development. • The Lighting Districts Fund accounts for the costs associated with providing street lights throughout the City. Revenues are provided by special assessments levied against the benefiting property owners. • The Housing Successor Agency Fund accounts for the assets of the former Redevelopment Agency's Low and Moderate Income Housing Fund. The source of revenue in the fund is primarily from interest received from the notes and loans receivable. • The Fire District Fund accounts for the revenue and disbursement of funds received by the Rancho Cucamonga Fire Protection District in the course of the District's fire protection services. The source of revenue in the fund is primarily from property taxes. 49 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 1: Organization and Summary of Significant Accounting Policies (Continued) The City reports the following major proprietary funds: • The Municipal Utility Fund accounts for the costs of labor and materials used in the operation, maintenance, construction and consumption of electric services to certain residential, commercial, and industrial customers within the City. • The Fiber Optic Network Fund accounts for receipts from user charges and leases for conduit and fiber access, costs associated with the City's existing utility, information technology and traffic fiber conduits. Additionally, the City reports the following fund types: • Capital Projects Funds are used to account for financial resources used for the acquisition or construction of major capital facilities (other than those financed by the proprietary funds). • Internal service funds account for the financial transactions related to repair, replacement and maintenance of City -owned vehicles and equipment and the City's general information systems and telecommunications hardware and software. • Agency funds are custodial in nature and do not involve the measurement of results of operations. The City's agency funds account for deposits held by the City in its fiduciary capacity and assessments received for various purposes which are restricted for payment of principal, interest and penalties on special obligation bonds. • A private -purpose trust fund is used to account for the assets and liabilities of the former Redevelopment Agency and the allocated revenue to pay estimated installment payments of enforceable obligations until the obligations of the former Redevelopment Agency are paid in full and assets have been liquidated. As a general rule, the effect of interfund activity has been eliminated from the government -wide financial statements. Exceptions to this general rule are charges between the government's proprietary funds functions and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include: 1) charges to customers or applicants for goods, services or privileges provided; 2) operating grants and contributions; and 3) capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from non -operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the enterprise funds and internal service funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non -operating revenues and expenses. 50 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 1: Organization and Summary of Significant Accounting Policies (Continued) d. Assets, Deferred Outflows, Liabilities, Deferred Inflows and Net Position or Equity Cash and Investments All cash and investments, except those that are held by fiscal agents or through a trust, are held in a City pool. These pooled funds are available upon demand and therefore are considered cash and cash equivalents for purposes of the statement of cash flows. Investments held by fiscal agents with an original maturity of three months or less are also considered cash equivalents and are shown as restricted assets for financial statement presentation purposes. Investments for the City, as well as for its component units, are reported at fair value. Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to/from other funds" (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the non -current portion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds." Any residual balances outstanding between the governmental activities and business -type activities are reported in the government -wide financial statements as "internal balances." All trade and property tax receivables are shown net of allowance for uncollectibles. Prepaid Costs Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government -wide and fund financial statements. These are accounted for using the consumption method, and, accordingly, the expenditure is recorded in the period in which the goods or services are received. Restricted Assets Certain proceeds of debt issues, as well as certain resources set aside for their repayment, are classified as restricted assets on the balance sheet because their use is limited by applicable bond covenants. Investments in the PARS Public Agencies Post -Employment Benefits Trusts are held for the purpose of rate stabilization of future pension obligations. The trusts are Section 115 irrevocable trusts. The investments are reported at fair value. Capital Assets Capital assets, which include land, building improvements, improvements other than buildings, computer equipment and software, equipment and vehicles, furniture and fixtures, infrastructure (e.g., roads, bridges, sidewalks and similar items) and intangible assets, are reported in the applicable governmental or business -type activities columns in the government -wide financial statements. The City defines capital assets as assets with an initial, individual cost of more than $5,000 (amount not rounded) and an estimated useful life in excess of one year. Such assets are recorded at historical cost when purchased or constructed. Donated capital assets are recorded at the estimated price that would be paid to acquire the asset at the date of acquisition. 51 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 1: Organization and Summary of Significant Accounting Policies (Continued) The costs of normal maintenance and repairs that do not add to the value of the assets or materially extend assets' lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Capital assets are depreciated using the straight-line method over the following estimated useful lives: Assets Years Building improvements 10-50 Improvements other than buildings 10-40 Computer equipment and software 3-15 Equipment and vehicles 3-20 Furniture and fixtures 3-20 Infrastructure 10-75 Intangible assets 10-15 Deferred Outflows/Inflows of Resources In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The government reports deferred outflows of resources related to pensions arising from certain changes in the net pension liability, net pension asset, and net OPEB asset. In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government has several items that qualify for reporting in this category: 1. Unavailable revenue is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues for revenues that are measurable but not collected within 60 days of the end of the current fiscal period or 180 days for sales tax and grant revenues. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. 2. Pension and OPEB related deferred inflows are reported only on the Statement of Net Position. The government reports deferred inflows of resources related to pensions arising from certain changes in the net pension liability, net pension asset, or net OPEB asset. 52 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 1: Organization and Summary of Significant Accounting Policies (Continued) Deferred inflows and outflows of resources related to changes in the net pension liability, net pension asset, and net OPEB asset are recognized systematically over time. Amounts are first recognized in the year the change occurs. The remaining amounts are to be recognized in future periods. The recognition period differs depending on the source of the change, and they currently are amortized over 5 years or the average remaining service life time. Pension For purposes of measuring the net pension liability, net pension asset, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the plans and additions to/deductions from the plans' fiduciary net position have been determined on the same basis as they are reported by the CalPERS Financial Office. For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value. GASB Statement No. 68 requires that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used. Valuation Date June 30, 2018 Measurement Date June 30, 2019 Measurement Period July 1, 2018 to June 30, 2019 PARS Retirement Enhancement Plan For purposes of measuring the net pension liability, net pension asset, deferred outflows of resources and deferred inflows of resources related to the retirement enhancement plan, and retirement enhancement plan expense, information about the fiduciary net position of the plan and additions to/deductions from the plan's fiduciary net position have been determined on the same basis as they are reported by the California Defined Benefit Pension Plan Program of the Public Agency Retirement System Trust. Contributions are recognized in the period in which the contributions are due and there exists a formal commitment to provide the contributions. Liabilities related to investment and administrative expenses are recognized when incurred. Those related to obligations for employee benefits and refunds are recognized when due and payable in accordance with the terms of the plan. GASB Statement No. 68 requires that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used. Valuation Date June 30, 2018 Measurement Date June 30, 2019 Measurement Period July 1, 2018 to June 30, 2019 53 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 1: Organization and Summary of Significant Accounting Policies (Continued) Other Post -Employment Benefits (OPEB) For purposes of measuring the net OPEB asset, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the OPEB Plan, the assets of which are held by the California Employers' Retiree Benefit Trust (CERBT), an agent multiple -employer defined benefit healthcare plan administered by the California Public Employees' Retirement System (CalPERS), and additions to/deductions from the OPEB plan's fiduciary net position have been determined by an independent actuary. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value. GASB Statement No. 75 requires that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used: Valuation Date Measurement Date Measurement Period Accrued Employee Benefits June 30, 2019 June 30, 2019 July 1, 2018 to June 30, 2019 The City's policy permits employees to accumulate earned but unused vacation and sick pay benefits. The total amount of liability for unused vacation and sick pay benefits is accrued when incurred in the government -wide financial statements. The City utilizes the General Fund and the Fire District Special Revenue Fund in the governmental fund financial statements to account for the short-term portion of its liability. The short-term portion is the unused reimbursable leave still outstanding following an employee's resignation or retirement. Vacation pay is payable to employees at the time a vacation is taken or upon termination of employment. Fire District employees cannot accrue more than one and one-half times their regular annual entitlement. Sick leave is payable when an employee is unable to work because of illness. For City employees, those who terminate their employment after five years of continuous service and have at least 50% of five years sick leave accrued on the books upon termination may be paid for 120 hours of the accrued leave. For Fire District employees, sick leave may be accumulated indefinitely or an employee with ten or more years of service is eligible to convert unused sick leave to vacation in accordance with the following and with any remainder of hours to still remain unused sick time: Accumulated Sick Employee Leave Balance Vacation Type Prior Calendar Year Conversion Rate shift 108 - 144 hours one-half shift 72 - 108 hours one-fourth 40-hour 90 - 120 hours one-half 40-hour 60 - 90 hours one-fourth 54 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 1: Organization and Summary of Significant Accounting Policies (Continued) Upon service retirement of a public safety employee, the option exists to sell back up to one-half of total accumulated sick leave, have the leave credited toward service in accordance with the Public Retirement Law, or apply the cash value of up to 100% of the leave to the employee's VEBA account. All unused sick leave is forfeited upon termination, other than for normal retirement. Long -Term Obligations In the government -wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business -type activities or proprietary fund type statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance cost, whether or not withheld from the actual debt proceeds received, are reported as debt service expenses. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Fund Balance Fund balance is essentially the difference between the assets, liabilities, and deferred inflows reported in a governmental fund. There are five separate components of fund balance, each of which identifies the extent to which the City is bound to honor constraints on the specific purposes for which amounts can be spent. • Non -spendable fund balance (inherently non -spendable) • Restricted fund balance (externally enforceable limitations on use) • Committed fund balance (self-imposed limitations on use) • Assigned fund balance (limitation resulting from intended use) • Unassigned fund balance (residual net resources) The General Fund is the only fund that can report a positive unassigned fund balance amount. In governmental funds other than the General Fund, if expenditures incurred for specific purposes exceed the amounts that are restricted, committed or assigned to these purposes, it may be necessary to report a negative unassigned fund balance in that fund. 55 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 1: Organization and Summary of Significant Accounting Policies (Continued) The City Council, as the City's highest level of decision -making authority, may commit fund balance for specific purposes pursuant to constraints imposed by the adoption of a resolution. These committed amounts cannot be used for any other purpose unless the City Council removes or changes the specified use through the same type of formal action taken to establish the commitment. City Council action to commit fund balance needs to occur within the fiscal reporting period; however, the amount can be determined subsequently. Fund balance commitments are as follows: Chanaes in Economic Circumstances The City's General Fund balance committed for changes in economic circumstances is established at a goal of a nine month reserve, or 75% of the City General Fund operating budget for the upcoming fiscal year. The Fire District's fund balance committed for changes in economic circumstances is established at a goal of a nine month reserve, or 75% of the Fire District's operating budget for the upcoming fiscal year. The specific uses of this commitment include: 1) the declaration of a state or federal state of emergency or a local emergency as defined in Rancho Cucamonga Municipal Code Section 2.36.020; or 2) a change in economic circumstances in a given fiscal year that results in revenues to the City/Fire District being insufficient to cover expenditures for one or more fiscal years. The City Council/Fire Board may, by the affirming vote of four members, change the amount of this commitment and/or the specific uses of these monies. City Facilities Capital Repair The City's General Fund balance committed for City facilities capital repair and property acquisition is established at a minimum goal of 50% of capital assets value comprised of construction in progress (excluding infrastructure), building improvements, and improvements other than buildings for governmental activities, excluding assets owned by the Fire District. Fire District Facilities Capital Repair The Fire District's fund balance committed for Fire District facilities capital repair to a minimum goal of 50% of capital assets value comprised of construction in progress (excluding infrastructure), building improvements, and improvements other than building for public safety -fire activities. Working Capital The City's General Fund balance committed for Working Capital is established at a minimum goal of 5% of the City's General Fund operating budget for the upcoming fiscal year. The Fire District's fund balance committed for Working Capital is established at a minimum goal of 50% of the District's operating budget for the upcoming fiscal year. Self -Insurance The City's General Fund balance and the Fire District's fund balance committed for payment of Worker's Compensation, General Liability, and Employment Practices Liability claims is established at a minimum goal of eight times the City's and the Fire District's total yearly SIRs for all types of insurance coverage. 56 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 1: Organization and Summary of Significant Accounting Policies (Continued) PASIS Worker's Compensation Tail Claims The Fire District's fund balance committed for payment of outstanding Worker's Compensation claims remaining after the Fire District's withdrawal from PASIS is established at a goal equal to the most recent fiscal year end Claims Cost Detail Report from the Fire District's third -party administrator plus 15%. EmDlovee Leave Pavouts The City's General Fund balance and the Fire District's fund balance committed for employee leave payouts is valued in accordance with the City's labor contracts as of the last day of the fiscal year. Vehicle and Equipment Replacement The Fire District's fund balance committed for the replacement of fire safety vehicles and equipment as determined based on the Fire District's replacement criteria is established at a minimum goal of 50% of Fire District vehicle and equipment replacement value. Law Enforcement The City's General Fund balance committed for public safety purposes, including operations, equipment, capital outlay, personnel, and booking fees. The funding goal for this reserve is the equivalent of 100% of the most recently approved Schedule A from the San Bernardino County Sheriff's Department. Fund Balance Flow Assumptions Sometimes the government will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. The City considers restricted fund balance to have been spent first when an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available. Similarly, when an expenditure is incurred for purposes for which amounts in any of the unrestricted classifications of fund balance could be used, the City considers committed amounts to be reduced first, followed by assigned amounts and then unassigned amounts. Net Position In the governmental -wide financial statements and proprietary fund financial statements, net position is classified as follows: Net Investment in Capital Assets — This amount consists of capital assets net of accumulated depreciation and reduced by outstanding debt attributed to the acquisition, construction, or improvement of the assets. Restricted Net Position — This amount is restricted by external creditors, grantors, contributors, or laws or regulations of other governments. Unrestricted Net Position — This amount is all net position that does not meet the definition of "net investment in capital assets" or "restricted net position." 57 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 1: Organization and Summary of Significant Accounting Policies (Continued) Net Position Flow Assumption Sometimes the government will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted — net position and unrestricted — net position in the government -wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the government's policy to consider restricted — net position to have been depleted before unrestricted — net position is applied. Property Tax Property tax revenue is recognized on the modified accrual basis, that is, in the fiscal year for which the taxes have been levied providing they become available. Available means then due or past due and receivable within the current period and collected within the current period or expected to be collected soon enough thereafter to be used to pay liabilities of the current period. The County of San Bernardino collects property taxes for the City. Tax liens attach annually as of 12:01 A.M. on the first day in January proceeding the fiscal year for which the taxes are levied. Taxes are levied on both real and personal property as it exists on that date. The tax levy covers the fiscal period July 1 to June 30. All secured personal property taxes and one-half of the taxes on real property are due November 1; the second installment is due February 1. All taxes are delinquent, if unpaid, on December 10 and April 10, respectively. Unsecured personal property taxes become due on the first of March each year and are delinquent, if unpaid, on August 31. Functional Classifications Expenditures of the governmental funds are classified by function. Functional classifications are defined as follows: • General Government includes legislative activities, City Clerk, City Attorney, City Manager as well as management or supportive services across more than one functional area. • Public Safety - Police includes those activities which involve police protection. • Public Safety - Fire Protection includes activities of the Fire District which involve the protection of people and property from fire as well as emergency preparedness. • Public Safety - Animal Center includes those activities which involve animal care and services. • Community Development includes those activities which involve planning and economic development, as well as building and safety. • Community Services includes activities which provide recreation, cultural and educational services. • Engineering and Public Works includes all maintenance, engineering and capital improvements which relate to streets, parks, flood control and other public facilities. 58 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 II. STEWARDSHIP Note 2: Stewardship, Compliance and Accountability a. Encumbrances Encumbrances are estimations of costs related to unperformed contracts for goods and services. They represent the estimated amount of the expenditure ultimately to result if unperformed contracts in progress at year-end are completed. They do not constitute expenditures or estimated liabilities. The following funds have encumbrances at June 30, 2020: General Fund $ 6,749,543 Development Impact Fees 6,873,306 Lighting Districts 55,398 Fire District 7,850,559 Other Governmental Funds 5,938,713 b. Deficit Fund Balances or Net Position The Lighting Districts Fund has a deficit fund balance of $4,886,654 at June 30, 2020. The deficit fund balance will be eliminated by the repayment of the interfund advance from the General Fund described in Note 6. The following nonmajor special revenue funds reported deficits in fund balance at June 30, 2020: Recreation $ 5,111 Pedestrian Grant 1,739 Energy Efficiency and Conservation Block Grant 96 Public Resource Grants 5,560 The deficits in the Recreation, Pedestrian Grant, and Pubic Resource Grants funds will be eliminated by future expected revenue sources. The deficit in the Energy Efficiency and Conservation Block Grant fund will be eliminated with a final accounting and close-out of the fund. III. DETAILED NOTES ON ALL FUNDS Note 3: Cash and Investments As of June 30, 2020, cash and investments were reported in the accompanying financial statements as follows: Governmental activities $ 361,157,322 Business -type activities 34,399,891 Fiduciary funds 51,734,483 Total Cash and Investments $ 447,291,696 59 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 3: Cash and Investments (Continued) The City follows the practice of pooling cash and investments of all funds, except for funds required to be held by fiscal agents under provisions of bond indentures or funds held in a trust. Interest income earned on pooled cash and investments is allocated quarterly to the various funds based on average daily cash balances. Interest Income from cash and investments with fiscal agents and through a trust are credited directly to the related fund. Deposits At June 30, 2020, the carrying amount of the City's deposits was $32,277,487 and the bank balance was $34,222,931. The $1,945,444 difference represents outstanding checks and other reconciling items. The California Government Code requires California banks and savings and loan associations to secure a City's deposits by pledging government securities with a value of 110% of a City's deposits. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of a City's total deposits. The City Treasurer may waive the collateral requirement for deposits which are fully insured up to $250,000 by the FDIC. The collateral for deposits in federal and state chartered banks is held in safekeeping by an authorized Agent of Depository recognized by the State of California Department of Banking. The collateral for deposits with savings and loan associations is generally held in safekeeping by the Federal Home Loan Bank in San Francisco, California as an Agent of Depository. These securities are physically held in an undivided pool for all California public agency depositors. Under Government Code Section 53655, the placement of securities by a bank or savings and loan association with an "Agent of Depository" has the effect of perfecting the security interest in the name of the local governmental agency. Accordingly, all collateral held by California Agents of Depository are considered to be held for, and in the name of, the local governmental agency. Investments Under provision of the City's investment policy, and in accordance with the California Government Code, the following investments are authorized: • U.S. Government Agency Securities • Municipals (Warrants, Notes and Bonds) • Certificates of Deposit (or Time Deposits) • Negotiable Certificates of Deposit • FDIC Insured Certificates of Deposits • Banker's Acceptances • Commercial Paper • Local Agency Investment Fund (State Pool) • Joint Powers Authority (JPA) Investment Pool (short-term) • Deposit of Funds • Repurchase and Investment Agreements • Medium Term Corporate Notes • Supranational Securities .E CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 3: Cash and Investments (Continued) Investments Authorized by Debt Agreements The above investments do not address investment of debt proceeds held by a bond trustee. Investments of debt proceeds held by a bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City's investment policy. Investments in State Investment Pool The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. LAIF is overseen by the Local Agency Investment Advisory Board, which consists of five members, in accordance with State statute. The State Treasurer's Office audits the fund annually. The fair value of the position in the investment pool is the same as the value of the pool shares. Credit Risk As of June 30, 2020, The City's investments in municipal bonds and corporate notes were rated "Aa" by Moody's. As of June 30, 2020, the City invested in Federal Farm Credit Bank, Federal Home Loan Bank, Federal Home Loan Mortgage Corporation, and Federal National Mortgage Association which were all rated "Aaa" by Moody's. All securities were investment grade and were legal under State and City law. As of June 30, 2020, the City's investments in external investment pools and money market mutual funds are unrated. Custodial Credit Risk The custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the possession of an outside party. As of June 30, 2020, the City's deposits (bank balances) were insured by the FDIC up to $250,000 and the remaining balances were collateralized under California Law. Concentration of Credit Risk The City is in compliance with restrictions imposed by its investment policy, which limits certain types of investments. As of June 30, 2020, in accordance with GASB Statement No. 40, if the City has invested more than 5% of its total investments in any one issuer, it is exposed to credit risk. The following investments are considered exposed to credit risk: Federal Farm Credit Bank 8.90% Federal Home Loan Bank 9.79% Federal Home Loan Mortgage Corp. 12.49% Federal National Mortgage Association 9.19% Investments guaranteed by the U.S. government and investments in mutual funds and external investment pools are excluded from this. 61 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 3: Cash and Investments (Continued) Interest Rate Risk The City's investment policy limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. The City's investment policy establishes a maximum maturity of 180 days for Banker's Acceptances, 270 days for Commercial Paper, one year for Repurchase Agreements and five years for all other individual investments. The only exception to these maturity limits shall be the investment of the gross proceeds of tax-exempt bonds. The City has elected to use the segmented time distribution method of disclosure for its interest rate risk. As of June 30, 2020, the City had the following investments and original maturities: Investment Maturities (in Years) 6 months 6 months to 1 year to 3 Years to or less 1 year 3 years 5 years Fair Value Investments: Local Agency Investment Fund $ 112,116,758 $ - $ - $ - $ 112,116,758 Federal Governmental Agencies Federal Farm Credit Bank - - 8,342,506 28,579,788 36,922,294 Federal Home Loan Bank 12,060,139 - - 28,588,638 40,648,777 Federal Home Loan Mortgage Corp. 3,524,272 5,060,138 9,674,280 33,576,162 51,834,852 Federal National Mortgage Assoc. 5,528,759 - 9,571,584 23,025,416 38,125,759 Municipal Bonds 255,041 - 979,342 505,050 1,739,433 Corporate Bonds - - 16,573,769 3,245,646 19,819,415 Certificate of Deposit - 488,016 497,558 - 985,574 US Treasury 10,567,460 3,581,757 3,577,931 - 17,727,148 Supranational - 4,588,830 4,621,624 10,556,218 19,766,672 CALTRUST 23,522,651 - - - 23,522,651 Commercial Paper 16,491,805 3,491,880 19,983,685 Restricted Investments: Mutual Fund 12,602,434 - 12,602,434 Investments with Fiscal Agents: Money Market Funds 19,218,757 - - - 19,218,757 $ 215,888,076 $ 17,210,621 $ 53,838,594 $ 128,076,918 $ 415,014,209 Fair Value Hierarchy The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. 62 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 3: Cash and Investments (Continued) The City has the following recurring fair value measurements as of June 30, 2020: Level Investments by fair value level Totals Uncategorized 1 2 Local Agency Investment Fund $ 112,116,758 $ 112,116,758 $ - $ Federal Governmental Agencies Federal Farm Credit Bank 36,922,294 - 36,922,294 Federal Home Loan Bank 40,648,777 40,648,777 Federal Home Loan Mortgage Corporation 51,834,852 51,834,852 Federal National Mortgage Association 38,125,759 38,125,759 Municipal Bonds 1,739,433 1,739,433 Corporate Bonds 19,819,415 - 19,819,415 Certificate of Deposit 985,574 985,574 - US Treasury 17,727,148 17,727,148 - Supranational 19,766,672 - 19,766,672 Commerical Paper 19,983,685 19,983,685 - Restricted Investments Mutual Fund 12,602,434 - 12,602,434 Cash with Fiscal Agents Money Market Funds 19,218,757 19,218,757 - Totals $ 391,491,558 $ 131,335,515 $ 207,967,522 $ 52,188,521 Investments measured at amortized cost CALTRUST 23,522,651 Total Investments $ 415,014,209 Deposits and securities classified in Level 1 of the fair value hierarchy are valued using prices quoted in active markets for those securities. Local Agency Investment Funds are valued using specified fair value factors. Federal Agency Securities classified in Level 2 of the fair value hierarchy are valued using institutional bond quotes. There are no Level 3 investments. Note 4: Notes and Loans Receivables Beginning Ending Balance Additions Reductions Balance Governmental Activities Villa Pacifica Associates (Villa Pacifica 1) $ 229,881 $ 5,736 $ (235,617) $ NHDC (San Sevaine) 44,374,112 404,576 44,778,688 LINC-Pepperwood Housing Investors, LP 27,012,364 432,762 27,445,126 HB Housing Partners, L.P. 12,333,008 270,000 12,603,008 SCHDC (Rancho Verde) 7,561,322 97,499 7,658,821 SCHDC (Heritage Pointe Senior Apartments) 2,510,624 215,841 2,726,465 Rancho Workforce Housing, L.P. 31,884,465 760,062 (74,626) 32,569,901 North Town Housing Partners (Villa Del Norte) 10,333,182 177,876 10,511,058 NHDC (Olen Jones Senior Apartments) 4,476,761 128,232 4,604,993 Villa Pacifica 11 LP 9,051,319 260,514 9,311,833 Day Creek Senior Housing Partners 2, L.P. 4,093,512 1,079,272 5,172,784 Day Creek Senior Housing Partners, L.P. 4,941,585 143,800 5,085,385 First -Time Homebuyer Program 3,226,808 - (80,000) 3,146,808 $ 162,028,943 $ 3,976,170 $ (390,243) $ 165,614,870 63 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 4: Notes and Loans Receivables (Continued) Notes and loans receivables consist of the following at June 30, 2020: Governmental activities In January 1997, the former Rancho Cucamonga Redevelopment Agency (the Agency) entered into an agreement to loan Villa Pacifica Associates, a California Limited Partnership, up to $3,090,000 to develop senior rental housing for low and moderate income households. The term of the loan is 40 years, with simple interest accruing at 3% per annum on the outstanding principal balance. Payments of principal and interest on the loan are due and payable only when there is available annual cash flow from the development. This payment is 50% of the net annual cash flow. Upon dissolution of the Agency, the loan receivable was transferred to the Housing Successor Agency of the City. As of June 30, 2020, the outstanding balance was fully paid off. 2. On September 1, 2005, the Agency entered into a loan agreement with Northtown Housing Development Corporation (NHDC) for the purchase of undeveloped real property and the development of an apartment complex (San Sevaine) which will increase the supply of affordable housing to low and moderate income households for a period of ninety-nine (99) years. This loan is a line of credit not -to -exceed $40,700,000 with simple interest accruing at 1 % per annum from the date of disbursement for a term of 55 years (2060), as modified on May 6, 2009, with Amendment #2. Upon dissolution of the Agency, the loan receivable was transferred to the Housing Successor Agency of the City. As of June 30, 2020, the advances paid against this line of credit amount to $40,457,658 and accrued interest amounts to $4,321,030 for a total of $44,778,688. Accrued interest is offset by deferred revenue. 3. On April 19, 2006, the Agency entered into a loan agreement with LINC-Pepperwood Housing Investors, LP to provide financial assistance from the Low and Moderate Housing Set -aside Fund to purchase and rehabilitate the Pepperwood Apartment Homes, which will increase the supply of affordable housing to low and moderate income households, for not less than ninety-nine (99) years. The loan is in the form of a line of credit not -to -exceed $21,638,113, which includes the rollover of the BLT Partnership No. 1 loan of $2,350,000 and an amendment and increase of $1,288,113 on May 16, 2007. The outstanding principal balance of the loan will accrue simple interest at 2% per annum from the date of disbursement for a term of 56 years (2062). In addition to the extent there are Residual Receipts, the Developer shall pay to the Agency 50% of the Residual Receipts from the preceding year. Upon dissolution of the Agency, the loan receivable was transferred to the Housing Successor Agency of the City. As of June 30, 2020, advances paid against this line of credit amounts to $21,638,113 and accrued interest amounts to $5,807,013 for a total balance of $27,445,126. Accrued interest is offset by deferred revenue. 4. On September 1, 2005, the Agency entered into a loan agreement with HB Housing Partners, L.P. to provide financial assistance from the Low and Moderate Housing Set -aside Fund to purchase and rehabilitate the Woodhaven Manor Apartments, which will increase the supply of affordable housing to low and moderate income households for not less than ninety-nine (99) years. The loan is in the form of a line of credit not -to -exceed $9,000,000. Simple interest accrues on the advances as follows: 1) 3% per annum from the date of disbursement through and including the date 64 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 4: Notes and Loans Receivables (Continued) immediately prior to September 21, 2022; and 2) 2% per annum from September 21, 2022 through September 21, 2060. In addition, to the extent there are Residual Receipts, the Developer shall pay to the Agency either 33% or 50% of the Residual Receipts from the preceding year. Upon dissolution of the Agency, the loan receivable was transferred to the Housing Successor Agency of the City. As of June 30, 2020, the advances paid against this line of credit amounted to $9,000,000 and accrued interest amounts to $3,603,008 for a total of $12,603,008. Accrued interest is offset by deferred revenue. 5. On March 9, 2006, the Agency entered into a loan agreement with The Southern California Housing Development Corporation (SCHDC) for the acquisition, construction and operation of affordable housing apartments, referred to as the Rancho Verde Expansion project, which will increase the supply of very -low, low and moderate income households. This loan is a line of credit not -to -exceed $6,500,000 with simple interest accruing at 1.5% per annum until June 27, 2035, and 2% per annum thereafter and payable without demand or notice on June 27, 2060. Upon dissolution of the Agency, the loan receivable was transferred to the Housing Successor Agency of the City. As of June 30, 2020, the advances paid against this line of credit amounted to $6,499,910 and accrued interest amounts to $1,158,911 for a total of $7,658,821. Accrued interest is offset by deferred revenue. 6. On December 1, 2001, the Agency entered into a residual receipts promissory note loan agreement in the form of a line of credit not -to -exceed $4,000,000 with Malvern Housing Partners, L.P. and Southern California Housing Development Corporation (SCHDC) for the acquisition, construction and operation of a 49-unit senior multifamily apartment project, known as Heritage Pointe Senior Apartments. A portion of the necessary funding was provided from proceeds of a $4,000,000 bond issue by Southern California Housing Development Corporation. Funding provided by the Agency was in the form of semi-annual principal payments toward these bonds from the Agency's low and moderate income housing fund. As advances were made by the Agency, beginning April 1, 2003, these amounts were added to and became the principal balance of this Residual Receipts Note, and are accruing simple interest at 1 % per annum from the date of payment through December 2056. Annual payments of principal and accrued interest shall not commence until the operation of the project has generated residual receipts. On December 5, 2007, the residual receipts promissory note was amended and restated in connection with the refunding of the Southern California Housing Development Corporation's bond with the proceed of the Agency Housing Set -Aside Tax Allocation Bonds, Series 2007A and Series 2007B. All residual receipts in excess of fifteen percent of the gross operating income of the project shall be paid to the Agency annually. All principal and accrued interest at the simple interest rate of 1 % per annum shall be due and payable in April 2056. Upon dissolution of the Agency, the loan receivable was transferred to the Housing Successor Agency of the City. As of June 30, 2020, the advances paid against this line of credit amounted to $2,656,446 and accrued interest amounts to $70,019, for a total of $2,726,465. Accrued interest is offset by deferred revenue. 65 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 4: Notes and Loans Receivables (Continued) 7. On September 1, 2008, the Agency entered into a residual receipts promissory note loan agreement in the form of a line of credit not -to -exceed $27,565,000 with Rancho Workforce Housing, L.P. for the acquisition, construction and development of a 166-unit rental housing development, including 131 residential units for low and moderate income residents. This loan bears simple interest of 2.386% compounded annually from the date of disbursement, with a term commencing on the date of this agreement and continuing for fifty-five (55) years from the date of the recordation of the Certificate of Completion. Commencing after Borrower's fiscal year first ending after the completion of construction of the development, Borrower shall make repayments to the Agency equal to 50% of the Residual Receipts. Upon dissolution of the Agency, the loan receivable was transferred to the Housing Successor Agency of the City. As of June 30, 2020, the advances paid against this line of credit amounted to $25,868,857 and accrued interest amounts to $6,701,044 for a total of $32,569,901. 8. On September 26, 1994, the Agency entered into a Disposition and Development Agreement (DDA) and loan agreement (as modified on March 22, 1996) for $5,929,181 with North Town Housing Partners for the acquisition of the 88-unit multifamily rental Villa Del Norte housing project for low and moderate income households. Payments of principal and interest on the loan are due and payable only to the extent that net annual cash flow from the development is available. Upon dissolution of the Agency, the loan receivable was transferred to the Housing Successor Agency of the City. On October 9, 2014, the Loan was modified as a result of a refinancing of the project in order to provide funding for significant rehabilitation improvements to the development. As a result of the refinancing, the term of the Loan and the affordability covenant for the affordable units was extended by 55 years beginning September 1, 2014. The term of the Loan will now terminate on September 1, 2069. The note carries the same interest rate of 3% and the original principal amount of $5,929,181 remains the same. As of June 30, 2020, the outstanding balance amounts to $10,511,058, including accrued interest of $4,581,877. Accrued interest is offset by deferred revenue. 9. On June 6, 2001, the Agency entered into a loan agreement (as updated on December 1, 2002) for $4,700,000 with Northtown Housing Development Corporation (NHDC) for the development of the Olen Jones Senior Apartments. The term of the loan is 55 years, with zero interest accruing for the first 15 years, then accruing simple interest at 3% per annum for the remainder of the term. Payments of principal and interest on the loan are due and payable only to the extent that net annual cash flow from the development is available. Upon dissolution of the Agency, the loan receivable was transferred to the Housing Successor Agency of the City. As of June 30, 2020, the outstanding balance amounts to $4,274,000 and accrued interest amounts to including $330,593 for a total of $4,604,993. Accrued interest is offset by deferred revenue. 10. On July 11, 2014, the City entered into a loan agreement with 7418 Archibald LLC ("Developer") in the amount of $42,913 ("City Predevelopment Loan"), pursuant to certain Acquisition, Disposition, Development and Loan Agreement dated February 19, 2014, between Developer and the City (the "ADDLA"), to develop a 60-unit affordable senior housing project at 7418 Archibald Avenue, referred to as Villa Pacifica II. The interest of the loan is zero percent (0%) per annum. The principal and any interest due under this Note shall be repaid or forgiven as set forth in the ADDLA, as amended by a first Implementation and Amendment to Acquisition, Disposition, Development and Loan Agreement dated February 17, 2016 between the Borrower's predecessor -in -interest and City and a Second Implementation and Amendment to Acquisition, Disposition, Development and Loan Agreement dated April 1, 2017. The CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 4: Notes and Loans Receivables (Continued) loan may be prepaid in full or in part, at any time without penalty or premium. On April 1, 2017, the City entered into a Promissory Note Secured By Deed of Trust with Villa Pacifica II LP ("Borrower"), not to exceed the sum of $8,683,821 consisting of the existing Predevelopment Loan of $42,913 made by the City to the Developer, a $2,880,000 purchase money loan in connection with the acquisition of land from City, a $2,760,908 construction loan that is being partially disbursed on the date of the closing for the City impact fees and to reimburse Villa Pacifica II LP for construction costs accrued prior to the date of the loan, and a permanent loan of up to $3,000,000 ("Perm Loan Principal') to be disbursed as described in the ADDLA from Villa Pacifica I Funds actually received by the City under the Villa Pacifica I Note. The term of the loan is 55 years, with simple interest accruing at 3% per annum on the outstanding principal balance. Payment of principal and interest is 50% of the Residual Receipts, with payments credited toward accrued interest and then to outstanding principal, on an annual basis on June 1 of each calendar year. As of June 30, 2020, the advances paid against this line of credit amounted to $8,683,821 and accrued interest amounted of $628,012, for a total amount of $9,311,833. 11. On May 4, 2016, the City approved a Disposition, Development, and Loan Agreement (DDLA) with Day Creek Senior Housing Partners, LP, also known as National CORE, for the development of a 140-unit senior rental affordable housing project at west of Day Creek Boulevard and north of Base Line Road. The DDLA was amended in June 2017, June 2018, and March 2019. On March 6, 2019, the City entered into land and construction loans in connection with the DDLA: The City Land Loan valued at $7,700,000, consisting of a purchase money loan for the acquisition of the property from the City, was divided into two separate loans: (1) City Land Loan to Day Creek Senior Housing Partners, LP (9% Tax Credit Owner) in the amount of $4,896,303 and (2) City Land Loan to Day Creek Senior Housing Partners 2, L.P. (4% Tax Credit Owner) in the amount of $2,803,697. Both loans bear 2.91 % interest compounded annually for 55 years. Payment of principal and interest is 50% of the Residual Receipts, with payments credited toward accrued interest and then to the outstanding principal, on an annual basis on June 1 of each calendar year. As of June 30, 2020, the outstanding balances of the land loans are as follows: (a) Day Creek Senior Housing Partners, LP amounts to $5,085,385 including $189,082 accrued interest and (b) Day Creek Senior Housing Partners 2, L.P. amounts to $2,911,969 including $108,272 accrued interest. Accrued interest is offset by deferred revenue. The City Construction Loan valued at $5,700,000 with Day Creek Senior Housing Partners 2, L.P. (4% Tax Credit Owner) was deposited to JPMorgan Chase Bank, N.A.(Escrow) held and disbursed pursuant to the terms of the Escrow Agreement among the City, 4% Tax Credit Owner, and JPMorgan Chase Bank, N.A. The loan bears simple interest of 3% per annum from the date of disbursement from the Escrow fund for a term of 55 years. Payment of principal and interest is 50% of the Residual Receipts, with payments credited toward accrued interest and then to outstanding principal, on an annual basis on June 1 of each calendar year. As of June 30, 2020, the outstanding balance is $2,260,815 including accrued interest of $66,008 Accrued interest is offset by deferred revenue. 67 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 4: Notes and Loans Receivables (Continued) 12. First-time homebuyer loans represent the loans made under the First Time Homebuyer's Program. The payment of the loan is not due until the property is sold. As of June 30, 2020, the outstanding balance amounts to $3,146,808 with no interest due. Total notes and loans receivables for governmental activities at June 30, 2020, including accrued interest of $27,564,869 amounted to $165,614,870. Business -type activities 13. In October 2015, the City entered into an unsecured promissory note for the costs of constructing an electric utility line extension related to the development of a hotel on Haven Avenue. The costs to construct the electric utility line extension amounted to $337,480. The note accrues simple interest at 1.46% per month (17.52% per annum) beginning September 1, 2018 and is fully due and payable on February 1, 2022. Outstanding principal may be prepaid in whole or in part at any time. Principal may be partially reduced on February 1 of each year based on average hotel occupancy for the preceding calendar year exceeding thresholds established in the note. As of June 30, 2020, the outstanding balance amounts to $70,000. Total notes and loans receivables for the business -type activities at June 30, 2020, amounted to $70,000. Business -type activities 14. In October 2015, the City entered into an unsecured promissory note for the costs of constructing an electric utility line extension related to the development of a hotel on Haven Avenue. The costs to construct the electric utility line extension amounted to $337,480. The note accrues simple interest at 1.46% per month (17.52% per annum) beginning September 1, 2018 and is fully due and payable on February 1, 2022. Outstanding principal may be prepaid in whole or in part at any time. Principal may be partially reduced on February 1 of each year based on average hotel occupancy for the preceding calendar year exceeding thresholds established in the note. As of June 30, 2020, the outstanding balance amounts to $70,000. Total notes and loans receivables for the business -type activities at June 30, 2020, amounted to $70,000. CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 5: Capital Assets Governmental activities capital assets for the year ended June 30, 2020, was as follows: Beginning Ending Balance Increases Decreases Transfers Balance Governmental Activities: Capital assets, not being depreciated: Land $ 98,138,850 $ - $ - $ $ 98,138,850 Right of way 237,012,767 - - 237,012,767 Construction -in -progress 11,407,379 13,398,599 (2,407,692) (5,378,414) 17,019,872 Total Capital Assets, Not Being Depreciated 346,558,996 13,398,599 (2,407,692) (5,378,414) 352,171,489 Capital assets, being depreciated: Building improvements 217,898,310 - - - 217,898,310 Improvement other than buildings 42,911,350 200,969 - 611,831 43,724,150 Equipment and vehicles 54,587,803 1,756,271 (651,799) 176,685 55,868,960 Furniture and fixtures 3,783,490 - (241,603) - 3,541,887 Infrastructure 484,928,087 5,937,613 (675,558) 4,589,898 494,780,040 Intangible 3,328,862 - - - 3,328,862 Total Capital Assets, Being Depreciated 807,437,902 7,894,853 (1,568,960) 5,378,414 819,142,209 Less accumulated depreciation: Building improvements 66,101,361 7,060,446 - - 73,161,807 Improvement other than buildings 17,378,171 1,824,187 - - 19,202,358 Equipment and vehicles 41,207,347 3,237,148 (651,799) - 43,792,696 Furniture and fixtures 3,420,089 133,159 (241,603) - 3,311,645 Infrastructure 234,378,622 8,326,907 (34,843) - 242,670,686 Intangible 2,649,963 242,676 - - 2,892,639 Total Accumulated Depreciation 365,135,553 20,824,523 (928,245) - 385,031,831 Total Capital Assets, Being Depreciated, Net 442,302,349 (12,929,670) (640,715) 5,378,414 434,110,378 Governmental Activities Capital Assets, Net $ 788,861,345 $ 468,929 $ (3,048,407) $ - $ 786,281,867 Depreciation expense was charged to functions/programs of the primary government as follows: Governmental Activities: General government $ 345,213 Public safety - police 704,814 Public safety - fire protection 3,088,346 Engineering and public works 10,117,220 Community development 67,210 Community services 4,695,573 Internal service 1,806,147 Total Governmental Activities $ 20,824,523 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 5: Capital Assets (Continued) Business -type activities capital assets for the year ended June 30, 2020, was as follows: Beginning Ending Balance Increases Decreases Transfers Balance Business -Type Activities: Capital assets, not being depreciated: Land $ 5,451,015 $ - $ - $ - $ 5,451,015 Construction -in -progress 1,696,346 3,421,214 - (123,708) 4,993,852 Total Capital Assets, Not Being Depreciated Capital assets, being depreciated: Building improvements Improvement other than buildings Equipment and vehicles Furniture and fixtures Infrastructure Intangible Total Capital Assets, Being Depreciated Less accumulated depreciation: Building improvements Improvement other than buildings Equipment and vehicles Furniture and fixtures Infrastructure Intangible Total Accumulated Depreciation Total Capital Assets, Being Depreciated, Net Business -Type Activities Capital Assets, Net 7,147,361 3,421,214 - (123,708) 10,444,867 17,225,973 - - - 17,225,973 6,368,130 - - - 6,368,130 702,151 - - - 702,151 6,004 - - - 6,004 30, 947, 935 3,785,845 - 123,708 34, 857,488 25,858 - - - 25,858 55,276,051 3,785,845 - 123,708 59,185,604 11,201,248 431,198 - - 11,632,446 4,006,275 128,834 - - 4,135,109 531,684 17,436 - - 549,120 6,004 - - - 6,004 11,210,527 1,271,922 - - 12,482,449 25,858 - - - 25,858 26, 981, 596 1,849,390 - - 28, 830, 986 28, 294, 455 1,936,455 - 123,708 30, 354, 618 $ 35,441,816 $5,357,669 $ - $ - $ 40,799,485 Depreciation expense was charged to functions/programs of the primary government as follows: Business -Type Activities: Sports Complex Municipal Utility Fiber Optic Network Total Business -Type Activities $ 560,032 1,125, 367 163,991 $ 1,849,390 70 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 6: Interfund Receivable, Payable and Transfers The composition of interfund balances as of June 30, 2020, was as follows: Due To/From Other Funds Due to Other Funds Nonmajor Fire Governmental Fiber Optic Funds District Funds Network Total Due From Other Funds: General Fund $ 331,564 $ 3,379,599 $ 810,701 $ 4,521,864 Development Impact Fees 12,874 - - 12,874 Housing Successor Agency 3,308 - 3,308 Nonmajor Governmental Funds 21,208 - 21,208 Municipal Utility 9,151 - 9,151 Total $ 378,105 $ 3,379,599 $ 810,701 $ 4,568,405 Due to/from other funds were the results of routine interfund transactions not cleared prior to the end of the fiscal year or to cover negative cash balances at June 30, 2020. Advances To/From Other Funds Advances from Other Funds Lighting Sports Funds Districts Fire District Complex Total Advances to Other Funds: General Fund $ 11,501,310 $ 1,216,757 $ 1,847,623 $ 14,565,690 On August 16, 2017, the City Council authorized an advance of $14,400,340 from the General Fund to the Lighting Districts Fund to provide funding for the purchase and acquisition of Southern California Edison owned streetlights and the installation of LED lighting to streetlights, intersections, and bridges, and other one-time costs necessary to inventory the streetlights. The advance was completed in phases and bears interest at 1.0% on the outstanding balance. The advance is payable in monthly installments and the final payment will occur in August 2037. At June 30, 2020, the outstanding balance amounted to $11,501,310. On June 21, 2012, the General Fund advanced $4,556,198 to the Fire District to provide funding for the prepayment of the Fire District's side fund liability with CalPERS. The advance bears interest at 4.5% and is payable in monthly installments. The final payment will occur in October 2023. At June 30, 2020, the outstanding balance amounted to $1,216,757. On September 2, 2015, the General Fund advanced $3,215,612 to the Sports Complex to provide funding for the installation of a solar photovoltaic system at the Epicenter. The advance bears interest at 1.0% and is payable in monthly installments. The final payment will occur in February 2035. At June 30, 2020, the outstanding balance amounted to $1,847,623. 71 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 6: Interfund Receivable, Payable and Transfers (Continued) Interfund Transfers Transfers Out General Fire Municipal Nonmajor Funds Fund District Utility Governmental Total Transfers In General Fund $ $ $ 1,407,380 $2,454,226 $ 3,861,606 Fire District - 29,665 29,665 Lighting Districts 457,900 - 457,900 Fiber Optic Network 939,603 939,603 Internal Service Funds 571,864 105,466 - 677,330 Nonmajor Governmental 668,847 28 34,651 703,526 Nonmajor Enterprise 1,756,963 - - 1,756,963 $ 4,395,177 $ 105,494 $ 1,407,380 $2,518,542 $ 8,426,593 The General Fund transferred $457,900, $939,603, $571,864, $668,847, and $1,756,963 to the Lighting Districts Fund, Fiber Optic Network Fund, Internal Service Funds, Nonmajor Governmental Funds, and Nonmajor Enterprise Funds respectively, to cover the budgeted amounts. The Fire District Fund transferred $105,466 and $28 to the Internal Service Funds and Nonmajor Governmental Funds respectively, to cover the cost of operations. The Municipal Utility transferred $1,407,380 to the General Fund to cover the cost of operations. The Nonmajor Governmental Funds transferred $2,454,226, $29,665, and $34,651 to the General Fund, Fire District Fund, and other Nonmajor Governmental Funds respectively, for the purpose of providing financial resources to cover expenditures. Note 7: Long -Term Debt Obligations a. Long -Term Debt — Governmental Activities The following is a schedule of changes in governmental activities long-term debt for the fiscal year ended June 30, 2020: Beginning Ending Due Within Balance Additions Repayments Balance One Year Capital Leases: Dell Blade Servers $ 1,919,173 $ - $ 453,174 $ 1,465,999 $ 470,310 Capital Leases Payable On December 5, 2018, the City entered into leased purchase agreements with Dell Financial Services to finance the acquisition of hardware equipment and software for the replacement of the City's data center infrastructure. The total cost of the equipment and related software acquired amounts to $2,446,503. The agreement requires annual payments of $527,330 with an interest component of 4.715% per annum due February V of each year with the final payment due February 2023. 72 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 7: Long -Term Debt Obligations (Continued) The future minimum lease obligations and the net present value of these minimum lease payments as of June 30, 2020 are as follows: Year ended Annual June 30, Payment 2021 2022 2023 Total payments $ 527,330 527,330 527,330 1,581,990 Interest portion (115, 991) Present value of lease payments $ 1,465,999 b. Long -Term Debt — Business -Type Activities The following is a schedule of changes in business -type activities long-term debt for the fiscal year ended June 30, 2020: Beginning Ending Due Within Balance Additions Repayments Balance One Year 2019 Lease Revenue Bonds $ 12,195,000 $ - $ 310,000 $ 11,885,000 $ 425,000 Unamortized bonds premium 1,303,206 Unamortized bonds discount (9,048) Total $ 13,179,158 2019 Lease Revenue On January 30, 2019, the Financing Authority issued the 2019 Lease Revenue Bonds Series A (tax-exempt) in the amount of $9,875,000 and 2019 Lease Revenue Bonds Series B (taxable) in the amount of $2,320,000 to finance the acquisition, design, construction and equipment of an expansion to the City's existing fiber optic network pursuant to a lease agreement between the City and the Financing Authority. Series A Bonds were issued with a premium of $1,371,795 and Series B Bonds were issued with a discount of $10,857. The Series A and B Bonds mature annually on May 1st, with Series A beginning in 2025 and through 2039 and Series B beginning in 2020 and through 2025. Interest on the Series A and B Bonds is paid on May 1st and November 1st of each year, commencing November 1, 2019 with interest ranging from 2.85% to 5.00%. The Series A Bonds maturing on or before May 1, 2019 are not subject to redemption prior to their maturities, while the Series A Bonds maturing on or after May 1, 2030 are subject to optional redemption at the option of the Financing Authority as a whole or in part, on any date on or after May 1, 2019, at a redemption price equal to the principal amount of the Bonds. The Series B Bonds are not subject to optional redemption. 73 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 7 Note 8: Note 9 Long -Term Debt Obligations (Continued) The following schedule illustrates the debt service requirements to maturity for the 2019 Lease Revenue Bonds Series A and B as of June 30, 2020: Year Ending June 30 2021 2022 2023 2024 2025 2026-2030 2031-2035 2036-2039 Series A Series B Principal Interest 250,000 2,740,000 3,475,000 3,410,000 $ 449,456 449,456 449,456 449,456 449,456 1,937,031 1,207,531 338,544 Principal Interest $ 425,000 $ 60,375 440,000 47,838 450,000 34,638 465,000 21,138 230,000 7,188 Total $ 9,875,000 $ 5,730,386 $ 2,010,000 $ 171,177 The Bonds are secured by lease payment revenues, which consist of lease payments for the use and possession of the Central Park facility. The lease payments are anticipated to be realized from private connections to the fiber optic network that will generate revenues for the City. In the event of default, the Trustee, as the assignee of the Finance Authority under the lease agreement for the Central Park facility, may exercise any remedies available pursuant to the law. However, the Trustee may not accelerate the lease payments or otherwise declare any lease payments not in default to be immediately due and payable, terminate the lease agreement, or cause the leasehold interest of the Finance Authority or of the City in the Central Park facility to be sold. The City in the event of default is liable for the lease payment of the Central Park facility and the performance of the lease agreement. Advances from the Successor Agency During the formation of Community Facilities District CFD 2000-01 (CFD 2000-01), a number of meetings were held with property owners within the proposed boundaries to discuss participation in CFD 2000-01 and benefits to their property. As a result of those meetings, the approved boundary map was modified at the landowners' request to exclude certain properties from the CFD 2000-01 boundaries. Property owners that were excluded from CFD 2000-01 boundaries, but will be receiving direct benefit from the improvements constructed by CFD 2001-01, were advised that reimbursement would be required when their properties are developed. The Redevelopment Agency advanced the pro-rata share for properties that will receive benefit from the improvements, but are not participating in CFD 2000-01. At June 30, 2020, the outstanding amount of the advance was $3,953,624. Compensated Absences The City's policies relating to compensated absences are described in Note 1. The liability will be paid in future years by the General Fund and the Fire District Fund as it becomes due. Balance Balance Due in June 30, 2019 Additions Deletions June 30, 2020 One Year Governmental Activities: Compensated Absences $ 7,138,630 $ 5,694,023 $ 5,076,750 $ 7,755,903 $ 5,505,000 74 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 10: Note 11: Other Special Obligations The following issues of Residential Mortgage Revenue Bonds, Special Assessment District Bonds, and Community Facility District Bonds are not reflected in the Statement of Net Position because these are special obligations payable solely from and secured by specific revenue sources described in the resolutions and official statements of the respective issues. Neither the faith and credit nor the taxing power of the City, the State of California or any political subdivision thereof, is pledged for the payment of these bonds. The outstanding amounts at June 30, 2020, were as follows: City of Rancho Cucamonga: Assessment District 93-1 Special Tax Refunding Bond, Series 2015: Community Facilities District No. 2000-01 Community Facilities District No. 2000-02 Community Facilities District No. 2001-01 Series A Community Facilities District No. 2001-01 Series B Community Facilities District No. 2006-01 Community Facilities District No. 2006-02 Community Facilities District No. 2000-03 Community Facilities District No. 2003-01 Series A Community Facilities District No. 2003-01 Series B Community Facilities District No. 2004-01 Successor Agency of the Former Rancho Cucamonga Redevelopment Agency: Multi -Family Housing Revenue Bond: Series 1997A Total Pension Plan Obligations Net Pension Net Pension Liability Asset Outstanding Amount at June 30, 2020 640,000 287,000 2,752,000 5,816,000 563,000 3,253,000 1,937,000 6,013,000 12,150, 000 2,358,000 28,360,000 1,649,591 $ 65,778,591 Deferred Pension Deferred Pension Outflows Inflows CalPERS City Miscellaneous Plan $ (53,048,079) $ - $ 12,336,539 $ (2,257,170) Fire District Miscellaneous Plan (2,841,232) - 730,086 (194,869) Fire District Safety Plan (37,850,274) - 10,050,454 (1,605,477) Total Cal PE RS (93, 739, 585) - 23,117, 079 (4,057,516) PARS (see Note 12) - 3,554,052 1,638,511 (2,199,904) Total Pension Plans $ (93,739,585) $ 3,554,052 $ 24,755,590 $ (6,257,420) 75 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 11: Pension Plan Obligations (Continued) a. City Miscellaneous Employee Pension Plan Plan Description The City of Rancho Cucamonga contributes to the California Public Employees Retirement System (PERS), an agent multiple -employer public employee defined benefit pension plan. PERS provides retirement and disability benefits, annual cost -of -living adjustments and death benefits to plan members and beneficiaries. PERS acts as a common investment and administrative agent for participating public entities within the State of California. Benefit provisions and all other requirements are established by state statute and City ordinance. Copies of PERS' annual financial report may be obtained from its executive office at 400 P Street, Sacramento, California 95814. Benefits Provided CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non -duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees' Retirement Law. Hire date Benefit formula Benefit vesting schedule Benefit payments Retirement age City Miscellaneous Plans Tier 1 * Tier 2* Tier 3 PEPRA Prior to September 1, 2010 2.5% @ 55 5 years service monthly for life minimum 50 yrs September 1, 2010 but prior to July 3, 2011 2.5% @ 55 5 years service monthly for life minimum 50 yrs July 4, 2011 and after 2.0% @ 55 5 years service monthly for life minimum 50 yrs January 1, 2013 and after 2.0% @ 62 5 years service monthly for life minimum 52 yrs Monthly benefits, as a % of 2.000% - 2.500%, 2.000% - 2.500%, 1.426% - 2.418%, 1.000% - 2.500%, eligible compensation Required employee contribution rates Required employer contribution rates 50 yrs - 55+ yrs, 50 yrs - 55+ yrs, 50 yrs - 63+ yrs, 52 yrs - 67+ yrs, respectively respectively respectively respectively 8.000% 21.022% 8.000% 21.022% * Plan is closed to new entrants 7.000% 21.022% 6.500% 21.022% 76 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 11: Pension Plan Obligations (Continued) Employees Covered As of the valuation date of June 30, 2018, the following employees were covered by the benefit terms of the Plan: Description Active members Transferred members Terminated members Retired members and beneficiaries Total Contribution Description Number of Members City Miscellaneous Plans 477 204 310 323 1,314 Section 20814(c) of the California Public Employees' Retirement Law (PERL) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through the CalPERS' annual actuarial valuation process. The actuarially determined rate is based on the estimated amount necessary to pay the Plan's allocated share of the risk pool's costs of benefits earned by employees during the year, and any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. For the year ended June 30, 2020, the employer contributions recognized as a reduction to the net position liability for the Plan were $5,135,066. Net Pension Liability The net pension liability is measured as the total pension liability, less the pension plan's fiduciary net position. The net pension liability of each Plan is measured as of June 30, 2019, using an annual actuarial valuation as of June 30, 2018 rolled forward to June 30, 2019 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is shown below. 77 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 11: Pension Plan Obligations (Continued) Actuarial Methods and Assumptions Used to Determine Total Pension Liability The June 30, 2018, valuation was rolled forward to determine the June 30, 2019, total pension liability, based on the following actuarial methods and assumptions: Valuation Date Measurement Date Actuarial Cost Method Actuarial Assumptions Discount Rate Inflation Projected Salary Increases Mortality Rate Table (1) Post Retirement Benefit Increase June 30, 2018 June 30, 2019 Entry Age Normal Cost Method 7.00% (net of administrative expenses) 2.50% Varies by Entry Age and Service Derived using CaIPERS' Membership Data for all Funds Contract COLA up to 2.0% until Purchasing Power Protection Allowance Floor on Purchasing Power applies, 2.50% thereafter (1) The mortality table used was developed based on CalPERS-specific data. The table includes 15 years of mortality improvements using the Society of Actuaries Scale 90% of scale MP 2016. For more details on this table, please refer to the December 2017 experience study report (based on CalPERSdemographic data from 1997 to 2015) that can be found on the CalPERS website. Long-term Expected Rate of Return The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all of the funds' asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses. The expected real rates of return by asset class are as followed: 78 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 11: Pension Plan Obligations (Continued) Assumed Asset Real Return Real Return Asset Class (1) Allocation Years 1 - 10 (2) Years 11+ (3) Global Equity 50.00% 4.80% 5.98% Fixed Income 28.00% 1.00% 2.62% Inflation Assets 0.00% 0.77% 1.81 % Private Equity 8.00% 6.30% 7.23% Real Estate 13.00% 3.75% 4.93% Liquidity 1.00% 0.00% -0.92% Total 100.00% (1) In the System's CAFR, Fixed Income is included in Global Debt Securities; Liquidity is included in Short-term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities. (2) An expected inflation of 2.0% used for this period. (3) An expected inflation of 2.92% used for this period. Discount Rate The discount rate used to measure the total pension liability was 7.15%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Changes in the Net Pension Liability The following table shows the changes in net pension liability recognized over the measurement period for the City Miscellaneous Plan. Increase (Decrease) Total Pension Plan Fiduciary Net Net Pension Liability Position Liability/(Assets) (a) (b) (c)=(a)-(b) Balance at: June 30, 2018 $ 224,880,771 $ 176,598,274 $ 48,282,497 Changes Recognized for the Measurement Period: Service Cost 4,749,046 - 4,749,046 Interest on the Total Pension Liability 16,072,077 16,072,077 Difference between Expected and Actual Experience 2,512,596 - 2,512,596 Contributions from the Employer - 5,133,141 (5,133,141) Contributions from Employees 1,976,074 (1,976,074) Net Investment Income 11,584,539 (11,584,539) Benefit Payments including Refunds of Employee Contributions (9,967,183) (9,967,183) - Administrative Expense (126,024) 126,024 Other Miscellaneous Expense 407 (407) Net Changes During 2018/19 13,366,536 8,600,954 4,765,582 Balance at: June 30, 2019 $ 238,247,307 $ 185,199,228 $ 53,048,079 79 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 11: Pension Plan Obligations (Continued) Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the Plan's as of the measurement date, calculated using the discount rate of 7.15 percent, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage -point lower (6.15 percent) or 1 percentage -point higher (8.15 percent) than the current rate: Net Pension Liability/(Asset) Discount Rate - 1% Current Discount Discount Rate +1% 6.15% 7.15% 8.15% City Miscellaneous Plan $ 86,298,427 $ 53,048,079 $ 25,726,393 Pension Plan Fiduciary Net Position The plan fiduciary net position disclosed in the GASB Statement No. 68 accounting valuation report may differ from the plan assets reported in the funding actuarial valuation report due to several reasons. First, for the accounting valuations, CalPERS must keep items such as deficiency reserves, fiduciary self-insurance and OPEB expense included as assets. These amounts are excluded for rate setting purposes in the funding actuarial valuation. In addition, differences may result from early Comprehensive Annual Financial Report closing and final reconciled reserves. Detailed information about each pension plan's fiduciary net position is available in the separately issued CalPERS financial reports. See CalPERS website for additional information. Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions As of the start of the measurement period (July 1, 2018), the net pension liability was $48,282,497. For the measurement period ending June 30, 2019 (the measurement date), the City incurred a pension expense of $11,178,624 for the Plan. As of June 30, 2020, the following were the reported deferred outflows of resources and deferred inflows of resources related to the pension plan: Current year contributions that occurred after the measurement date of June 30, 2019 Change of assumption Difference between expected and actual experiences Net difference between projected and actual earnings on pension plan investments Tota I Deferred Outflows of Deferred Inflows of Resources Resources 5,862,979 3,352,550 816,015 3,121,010 591,094 850,061 $ 12,336,539 $ 2,257,170 0 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 11: Pension Plan Obligations (Continued) Contributions subsequent to the measurement date in the amount of $5,862,979 are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the year ended June 30, 2020. Other amounts reported as deferred outflows or deferred inflows of resources related to pensions will be recognized as pension expense as follows: Measurement Deferred Period ended Outflows✓(Inflows) June 30: of Resources 2020 $ 3,931,289 2021 (437, 713) 2022 420,823 2023 301,991 2024 - Thereafter - Total $ 4,216,390 b. Fire District Miscellaneous and Safety Employee Pension Plans Plan Description All qualified permanent and probationary Fire District's employees are eligible to participate in the Safety Employee Pension Plan or Miscellaneous Employee Pension Plan, both cost -sharing multiple employer defined benefit pension plans administered by the California Public Employees' Retirement System (CalPERS). Benefit provisions under the Plans are established by State statute and Local Government resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website. Copies of PERS' annual financial report may be obtained from its executive office at 400 P Street, Sacramento, California 95814. Benefits Provided CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non -duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees' Retirement Law. 81 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 11: Pension Plan Obligations (Continued) Fire District Miscellaneous Cost -Sharing Plans Tier 1 * Tier 2 * PEPRA Prior to July 9, 2011 January 1, 2013 Hire date July 9, 2011 but prior to and after January 1, 2013 Benefit formula 2.5% @ 55 2.0% @ 55 2.0% @ 62 Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age minimum 50 yrs minimum 50 yrs minimum 52 yrs Monthly benefits, as a % of eligible 2.000% - 2.500%, 1.426% - 2.418%, 1.000% - 2.500%, compensation 50 yrs - 55+ yrs, 50 yrs - 63+ yrs, 52 yrs - 67+ yrs, respectively respectively respectively Required employee contribution rates 8.000% 7.000% 6.750% Required employer contribution rates 31.491% 10.918% 7.498% Fire District Safety Cost -Sharing Plans Tier 1 * Tier 2 * PEPRA Hire date Benefit formula Benefit vesting schedule Benefit payments Retirement age Monthly benefits, as a % of eligible compensation Required employee contribution rates Required employer contribution rates Employees Covered Prior to July 9, 2011 January 1, 2013 July 9, 2011 but prior to and after January 1, 2013 3.0%@50 3.0%@55 2.7%@57 5 years service 5 years service 5 years service monthly for life monthly for life monthly for life minimum 50 yrs minimum 50 yrs minimum 50 yrs 3.000%, 50+ yrs 2.400% - 3.000%, 2.000% - 2.700%, 50 yrs - 55+ yrs, 50 yrs - 57+ yrs, respectively respectively 9.000% 9.000% 12.000% 42.924% 20.956% 13.187% * Plan is closed to new entrants As of the valuation date of June 30, 2018, the following employees were covered by the benefit terms of the Plans: Number of Members Fire Miscellaneous Fire Safety Description Plans Plans Active members 19 92 Transferred members 5 9 Terminated members 12 3 Retired members and beneficiaries 21 75 Total 57 179 82 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 11: Pension Plan Obligations (Continued) Contribution Description Section 20814(c) of the California Public Employees' Retirement Law (PERL) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through the CaIPERS' annual actuarial valuation process. The actuarially determined rate is based on the estimated amount necessary to pay the Plans' allocated share of the risk pool's costs of benefits earned by employees during the year, and any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. For the year ended June 30, 2020, the employer contributions recognized as a reduction to the net position liability was $283,247 for the Miscellaneous Plan and $4,101,079 for the Safety Plan for a total of $4,384,326 for the plans. Net Pension Liability The net pension liability is measured as the total pension liability, less the pension plan's fiduciary net position. The net pension liability of each of the Plans is measured as of June 30, 2019, using an annual actuarial valuation as of June 30, 2018 rolled forward to June 30, 2019 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is shown below. Actuarial Methods and Assumptions Used to Determine Total Pension Liability The June 30, 2018 valuation was rolled forward to determine the June 30, 2019 total pension liability, based on the following actuarial methods and assumptions: Valuation Date Measurement Date Actuarial Cost Method Actuarial Assumptions Discount Rate Inflation Projected Salary Increases Mortality Rate Table (1) Post Retirement Benefit Increase June 30, 2018 June 30, 2019 Entry Age Normal Cost Method 7.00% (net of administrative expenses) 2.50% Varies by Entry Age and Service Derived using CaIPERS' Membership Data for all Funds Contract COLA up to 2.0% until Purchasing Power Protection Allowance Floor on Purchasing Power applies, 2.50% thereafter (1) The mortality table used was developed based on CalPERS-specific data. The table includes 15 years of mortality improvements using the Society of Actuaries Scale 90% of scale MP 2016. For more details on this table, please refer to the December 2017 experience study report (based on CalPERSdemographic data from 1997 to 2015) that can be found on the CalPERS website. 83 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 11: Pension Plan Obligations (Continued) Long-term Expected Rate of Return The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. In determining the long-term expected rate of return, CaIPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all of the funds' asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses. The expected real rates of return by asset class are as followed: Assumed Asset Real Return Real Return Asset Class (1) Allocation Years 1 - 10 (2) Years 11+ (3) Global Equity 50.00% 4.80% 5.98% Fixed Income 28.00% 1.00% 2.62% Inflation Assets 0.00% 0.77% 1.81 % Private Equity 8.00% 6.30% 7.23% Real Estate 13.00% 3.75% 4.93% Liquidity 1.00% 0.00% -0.92% Total 100.00% (1) In the System's CAFR, Fixed Income is included in Global Debt Securities; Liquidity is included in Short-term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities. (2) An expected inflation of 2.0% used for this period. (3) An expected inflation of 2.92% used for this period. Discount Rate The discount rate used to measure the total pension liability was 7.15%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability. 84 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 11: Pension Plan Obligations (Continued) Pension Liabilities, Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions As of June 30, 2020, the Fire District reported a net pension liability of $2,841,232 for its proportionate shares of the Miscellaneous Plan and $37,850,274 for its proportionate shares of the Safety Plan for a total of $40,691,506 for the cost -sharing plans. The Fire District's net pension liability for each rate Plan is measured as the proportionate share of the net pension liability. The net pension liability of each of the rate Plans is measured as of June 30, 2019, and the total pension liability for each rate Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2018, rolled forward to June 30, 2019, using standard update procedures. The Fire District's proportion of the net pension liability was based on a projection of the Fire District's long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined. The Fire District's proportionate share of the net pension liability for each rate Plan as of June 30, 2018 and 2019, was as follows: Proportion - June 30, 2018 Proportion - June 30, 2019 Fire Fire Miscellaneous Plan Safety Plan 0.0690% 0.5918% 0.0710% 0.6063% Changes - Increase (Decrease) 0.0020% 0.0145% For the year ended June 30, 2020, the City recognized pension expense of $597,076 and $8,138,767 for the Miscellaneous Plan and the Safety Plan, respectively. As of June 30, 2020, the following were the reported deferred outflows of resources and deferred inflows of resources related to the pension plans: Current year contributions that occurred after the measurement date of June 30, 2019 Change of Assumptions Difference between expected and actual experience Net difference between projected and actual earnings on pension plan investments Adjustment due to difference in proportions Miscellaneous Safety Deferred Deferred Deferred Deferred Outflows of Inflows of Outflows of Inflows of Resources Resources Resources Resources $ 332,407 $ - $ 4,727,134 $ 135,483 48,028 1,551,417 302,758 197,335 15,290 2,471,282 - - 49,674 - 520,695 64,861 10,735 1,300,621 - Difference in actual contribution and proportionate share of contribution calculation - 71,142 - 782,024 Total $ 730,086 $ 194,869 $ 10,050,454 $ 1,605,477 85 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 11: Pension Plan Obligations (Continued) The Miscellaneous Plan reported $332,407 and the Safety Plan reported $4,727,134 as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2021. Other amounts reported as deferred outflows or deferred inflows of resources related to pensions will be recognized as pension expense as follows: Net Deferred Outflows✓ Measurement Period (Inflows) of Resources Ended June 30: Miscellaneous Plan Safety Plan 2020 $ 203,566 $ 3,054,884 2021 (35, 741) 98,778 2022 24,947 462,870 2023 10,038 101,311 2024 - - Thereafter - - Total $ 202,810 $ 3,717,843 Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the Plan's as of the measurement date, calculated using the discount rate of 7.15 percent, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage -point lower (6.15 percent) or 1 percentage -point higher (8.15 percent) than the current rate: Discount Rate - 1% Current Discount Discount Rate +1% Net Pension Liability 6.15% 7.15% 8.15% Fire District Miscellaneous Plan $ 4,332,017 $ 2,841,232 $ 1,610,694 Fire District Safety Plan 57,780,648 37,850,274 21,510,489 $ 62,112,665 $ 40,691,506 $ 23,121,183 Pension Plan Fiduciary Net Position The plan fiduciary net position disclosed in the GASB Statement No. 68 accounting valuation report may differ from the plan assets reported in the funding actuarial valuation report due to several reasons. First, for the accounting valuations, CalPERS must keep items such as deficiency reserves, fiduciary self-insurance and OPEB expense included as assets. These amounts are excluded for rate setting purposes in the funding actuarial valuation. In addition, differences may result from early Comprehensive Annual Financial Report closing and final reconciled reserves. Detailed information about each pension plan's fiduciary net position is available in the separately issued CalPERS financial reports. See CalPERS website for additional information. 0 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 12: PARS Retirement Enhancement Plan 1. General Information About the Plan Plan Description The City of Rancho Cucamonga sponsors the PARS Retirement Enhancement Plan, an agent multiple -employer defined benefit pension plan. The Plan provides pension benefits to miscellaneous members (Tier 1) and city council members (Tier 2). Benefits are equal to a percentage of highest pay multiplied by years of service, with the percentage varying by retirement age based on the total combined CalPERS age factor, but not exceeding 3% at 60. Sample rates are as follows: Age 55 56 57 58 59 60+ Tier 1 and Tier 2 0.000% 0.100 0.200 0.300 0.400 0.500 The City and the Fire District have the right to amend, modify or terminate the plan at any time. Separate audited financial statements are not prepared. Benefits are increased by a 2% annual cost of living adjustment after retirement. There are no employee contributions for either tier. Benefits Provided PARS provides supplemental retirement benefits to eligible employees of the City. Employees are eligible to receive benefits under the plan if they meet the following requirements: 1) a miscellaneous employee of the City or City Council on or after December 1, 2002, 2) at least 56 years of age, 3) has completed 10 or more years of full-time continuous employment at the City, 4) has terminated employment with the City and has concurrently retired under CalPERS if an active CalPERS member, and 5) has applied for benefits under the plan. Benefits shall be in an amount equal to one - twelfth of the product of the number of full and partial years of full-time continuous employment with the City completed as of the Member's retirement times the Member's final pay, times the PARS benefit factor. The total combined CalPERS age factor and PARS benefit factor at retirement may not exceed three percent. Hire date on or after December 1, 2002 Benefit formula one -twelfth of the product of the number of full and partial years of full-time continuous employment with the City completed as of the Member's retirement times the Member's final pay, times the PARS benefit factor Benefit vesting schedule Benefit payments Retirement age Monthly benefits, as a % of eligible compensation Required employee contribution rates Required employer contribution rates * This plan is closed to new entrants 10 years service monthly for life minimum 56 yrs N/A - not based on % of eligible compensation 0.000% 4.400% 87 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 12: PARS Retirement Enhancement Plan (Continued) Employees Covered As of the valuation date of June 30, 2018, the following employees were covered by the benefit terms of the Plan: Description Active employees Inactives entitled to but yet receiving benefits Inactives currently receiving benefits Total Contribution Description Number of Members 225 3 114 342 The total plan contributions are determined through the PARS' annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Due to the City's pre -funding of its pension liability with PARS, the City's Plan had a net pension asset as of the June 30, 2018, actuarial valuation which positively impacted the actuarially determined rate. For the year ended June 30, 2020, the employer contributions recognized as a decrease to the pension liability were $628,911. 2. Net Pension Asset The net pension asset for the Plan is measured as the total pension liability, less the pension plan's fiduciary net position. The net pension liability of the Plan is measured as of June 30, 2019 using an annual actuarial valuation as of June 30, 2018, rolled forward to June 30, 2019, using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is shown below. Actuarial Methods and Assumptions Used to Determine Total Pension Liability The June 30, 2019 total pension liabilities were based on the following actuarial methods and assumptions: Actuarial Valuation Date Actuarial Cost Method Actuarial Assumptions Discount Rate Inflation Salary Increases Investment Rate of Return Mortality Rate Table Post Retirement Benefit Increase June 30, 2018 Entry Age Normal Cost Method 6.00% 2.75% annually Aggregate - 3.00% 6.00% net of pension investment and administrative expenses, including inflation CalPERS 1997-2015 Experience Study Post -retirement mortality projected fully generational with Society of Actuaries Scale MP- 2018 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 12: PARS Retirement Enhancement Plan (Continued) Discount Rate The discount rate used to measure the total pension liability was 6.00%. The expected long-term rate of return on investments was updated from 5.75% to 6.00%. Future contributions based on the funding policy will be made at contractually required rates, actuarily determined. Based on these assumptions, the fiduciary net position was projected to be available to make all projected future benefit payments. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments. The table below reflects long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. These geometric rates of return are net of administrative expenses. New Strategic Asset Class Allocation Real Return Equity Fixed Income RE ITs Cash Changes in the Net Pension Asset 48.25% 4.82% 45.00% 1.47% 1.75% 3.76% 5.00% 0.06% The following table shows the changes in net pension asset recognized over the measurement period. Balance at: June 30, 2018 Changes Recognized for the Measurement Period: Service Cost Interest on the Total Pension Liability Contributions from the Employer Net Investment Income Benefit Payments including Refunds of Employee Contributions Administrative Expenses Net Changes During 2018/19 Balance at: June 30, 2019 Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability (Asset) (a) (b) (c)=(a)-(b) $ 28,438,792 $ 31,908,259 $ (3,469,467) 660,456 - 660,456 1,716,445 - 1,716,445 - 609,239 (609,239) - 1,890,679 (1,890,679) (983,660) (983,660) - - (38,432) 38,432 1,393,241 1,477,826 (84,585) $ 29,832,033 $ 33,386,085 $ (3,554,052) Sensitivity of the Net Pension Asset to Changes in the Discount Rate The following presents the net pension asset of the Plan as of the measurement date, calculated using the discount rate of 6.00 percent, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage -point lower (5.00 percent) or 1 percentage -point higher (7.00 percent) than the current rate: Discount Rate - 1 % Current Discount Rate Discount Rate +1 % (5.00%) (6.00%) (7.00%) Plan's Net Pension Liability (Assets) $ 839,355 $ (3,554,052) $ (7,161,375) CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 12: PARS Retirement Enhancement Plan (Continued) 3. Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions As of the start of the measurement period, July 1, 2018, the net pension asset was $3,469,467. For the measurement period ending June 30, 2019, (the measurement date) the City incurred a pension expense of $675,525 for the Plan. As of June 30, 2020, the City has deferred outflows and deferred inflows of resources related to pensions as follows: Current year contributions that occurred after the measurement date of June 30, 2019 Difference between Expected and Actual Experiences Change of Assumption Net Difference between Projected and Actual Earnings on Pension Plan Investments Total Deferred Outflows Deferred Inflows of of Resources Resources $ 626,595 $ - - 1,472,058 1.011.916 491.029 - 236,817 $ 1,638,511 $ 2,199, 904 $626,595 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2021. Other amounts reported as deferred outflows or deferred inflows of resources related to pensions will be recognized as pension expense as follows: Measurement Deferred Period ended Outflowst(Inflows) of June 30: Resources 2020 $ (51,098) 2021 (397,500) 2022 (140, 768) 2023 (186, 643) 2024 (374,526) Thereafter (37,453) Total $ (1,187, 988) M CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 13: Other Post -Employment Benefits Plan Description The City does not provide post -employment benefits; however, medical coverage is provided to Fire District personnel and their dependents upon retirement under the Rancho Cucamonga Fire Protection District Memorandum of Understanding. The Fire District provides other post -employment benefits (OPEB) through the California Employers' Retiree Benefit Trust (CERBT), an agent multiple -employer defined benefit healthcare plan administered by the California Public Employees' Retirement System (CalPERS). For Tier 1 employees, the Fire District pays 100% of the medical insurance premium for the participant and their family. For Tier 2 employees, the Fire District contributes a predetermined monthly maximum for each eligible retiree towards health insurance. These benefits are provided per contract between the Fire District and the employee associations. Separate financial statements for the CERBT may be obtained by writing to CalPERS at Lincoln Plaza North 400 Q Street, Sacramento, California 95814 or by visiting the CalPERS website at www.calpers.ca.gov. Employees Covered As of the June 30, 2019, measurement date, the following current and former employees were covered by the benefit terms under the HC Plan: Description Active employees Inactives entitled to but yet receiving benefits Inactives currently receiving benefits Total Funding Policy Number of Members 113 7 71 191 The contribution requirement of plan members and the Fire District are established and may be amended by the City Council. Currently, contributions are not required from plan members. Contributions to the Plan include all amounts paid by the City directly to the Plan, cash benefit payments made directly to plan members, and an implied subsidy payment as determined by the June 30, 2019, actuarial valuation. These contributions are netted against the reimbursements received from the CERBT. During the June 30, 2019, measurement period, the City paid $977,883 in premiums for retiree medical insurance and was reimbursed $840,883, and the implied subsidy was $315,000, for a total contribution of $452,000. 91 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 13: Other Post -Employment Benefits (Continued) Net OPEB Liability The City's net OPEB liability was measured as of June 30, 2019 and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2019, that was rolled forward to determine the June 30, 2019, total OPEB liability, based on the following actuarial methods and assumptions: Actuarial Cost Method Actuarial Assumptions Discount Rate Inflation Salary Increases Investment Rate of Return Mortality Rate Mortality Improvement Healthcare Trend Rate Other Assumptions Entry Age Normal 5.50% 2.75% 3.00% per annum, in aggregate N/A CaIPERS 1997-2015 Experience Study Post -retirement mortality projected fully generational with Scale MP-2019 Non --Medicare - 7.5% for 2021, decreasing to an ultimate rate of 4.0% in 2076 Medicare - 6.3% for 2021, decreasing to an ultimate rate of 4.0% in 2076 PEMHCA minimum increases of 4.25% annually; The long-term expected rate of return on OPEB plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table for the CERBT Strategy 3: Long-term Target expected real Asset Class Allocation rate of return Global Equity 22.00% 4.82% Fixed income 49.00% 1.47% TIPS 16.00% 1.29% Commodities 5.00% 0.84% REITs 8.00% 3.76% Total 100.00% Discount Rate The discount rate used to measure the total OPEB liability was 5.50 percent. The projection of cash flows used to determine the discount rate assumed that City contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB plan's fiduciary net position was projected to be available to make all projected OPEB payments for current active and inactive employees and beneficiaries. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability. 92 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 13: Other Post -Employment Benefits (Continued) Changes in Assumptions In 2019, the mortality improvement scale was updated to the Society of Actuaries Scale MP-2019. In December 2019, the ACA Excise Tax was repealed and removed from the actuarial assumptions. Changes in the OPEB Liability The changes in the net OPEB liability for the Plan are as follows: Balance at: June 30, 2018 Changes Recognized for the Measurement Period: Service Cost Interest on the Total Pension Liability Difference between Expected and Actual Experience Changes of Assumptions Contributions from the Employer Net Investment Income Benefit Payments including Refunds of Employee Contributions Administrative Expenses Net Changes During 2018/19 Balance at: June 30, 2019 Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability (Asset) (a) (b) (c)=(a)-(b) $ 29,388,434 $ 29,409,475 $ (21,041) 424,685 - 424,685 1,606,264 1,606,264 (3,896,602) (3,896,602) (239,453) - (239,453) 469,195 (469,195) 2,114,944 (2,114,944) (1,216,647) (1,216,647) - (8,528) 8,528 (3,321,753) 1,358,964 (4,680,717) $ 26,066,681 $ 30,768,439 $ (4,701,758) Sensitivity of the Net OPEB Liability to Changes in the Discount Rate The following presents the net OPEB liability of the City if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2019: Current 1% Decrease Discount Rate 1% Increase (4.50%) (5.50%) (6.50%) Net OPEB Liability / (Asset) $ (1,051,661) $ (4,701,758) $ (7,672,459) Sensitivity of the Net OPEB Liability to Changes in the Health Care Cost Trend Rates The following presents the net OPEB liability of the City if it were calculated using health care cost trend rates that are one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2019: Current Healthcare 1% Decrease Cost Trent Rates 1% Increase (6.25%/5.3% decreasing (7.25%/6.3% decreasing (8.25%/7.3% decreasing to 3.00%) to 4.00%) to 5.00%) Net OPEB Liability / (Asset) $ (7,776,700) $ (4,701,758) $ (925,293) 93 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 13: Other Post -Employment Benefits (Continued) OPEB Plan Fiduciary Net Position CERBT issues a publicly available financial report that includes financial statements and required supplementary information. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the fiscal year ended June 30, 2020, the City recognized OPEB expense/(income) of ($107,627). As of June 30, 2020, the City reported deferred outflows of resources related to OPEB from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources OPEB contributions subsequent to measurement date $ 454,699 $ - Differences between expected and actual experiences - 3,409,527 Changes of assumptions - 209,521 Net difference between projected and actual earnings on OPEB plan investments - 272,835 Total $ 454,699 $ 3,891,883 The $454,699 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net OPEB liability during the fiscal year ending June 30, 2021. Other amounts reported as deferred outflows of resources related to OPEB will be recognized as expense as follows: Measurement Period ended June 30: Deferred Outflowst(Inflows) of Resources 2020 $ (567,277) 2021 (568,277) 2022 (581,277) 2023 (624, 032) 2024 (517,007) Thereafter (1,034,013) Total $ (3,891,883) Note 14: Summary Disclosure of Self -Insurance Contingencies The City and the Fire District are exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters for which the Member Entity obtains insurance coverage. The City and the Fire District are a members of the Public Agency Risk Sharing Authority of California-PARSAC (Authority), a joint powers authority, which provides joint protection programs for public entities covering automobile, general liability, errors and omission losses, workers' compensation, and property claims. Under the program, the City and Fire District have a $500,000 retention limit for liability, which is similar to a deductible, with the Authority being responsible for losses above that amount up to $1,000,000. The Authority carries an excess commercial liability policy of $25,000,000 in excess of its $1,000,000 retention limit to cover losses through affiliated risk management authorities. The Authority also provides one billion dollars aggregate per occurrence property coverage to its members with such coverage provided by purchased insurance. 94 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 14: Summary Disclosure of Self -Insurance Contingencies (Continued) Liabilities of the City and the Fire District are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported (IBNRs). The result of the process to estimate the claims liability is not an exact amount as it depends on many complex factors, such as inflation, changes in legal doctrines, and damage awards. Accordingly, claims are reevaluated periodically to consider the effects of economic and social factors. The estimate of the claims liability also includes amounts for incremental claim adjustment expenses related to specific claims and other claim adjustment expenses regardless of whether allocated to specific claims. Estimated recoveries, for example from salvage or subrogation, are another component of the claims liability estimate. The City and Fire District have a $250,000 retention limit for workers compensation. The Authority covers workers' compensation claims in excess of the $250,000 retention limit up to $500,000. The Local Agency Workers Compensation Excess Pool provides excess coverage to statutory limits. The City pays an annual premium to the Authority and may share in any surplus revenues or may be required to pay additional assessments based upon the Authority's operating results. Effective July 1, 2015, the Fire District became a member of the Public Agency Risk Sharing Authority of California (Authority) for its workers compensation insurance and concurrently separated from the Public Agency Self -Insurance System (PASIS) of San Bernardino County. The Fire District will maintain reserves to cover its June 30, 2020, estimated claims liability for workers compensation up to its self -insured retention of $250,000. Claims in excess of the self -insured amount will be covered by California State Association of Counties- Excess Insurance Authority. All workers compensation coverage from July 1, 2015, forward will be provided by the Authority. Under the program, the Fire District has a $250,000 retention limit for workers compensation. The Authority covers workers compensation claims in excess of the $250,000 retention limit up to $5,000,000. The Local Agency Workers Compensation Excess Pool provides excess coverage to statutory limits. The Fire District pays an annual premium to the Authority and may share in any surplus revenues or may be required to pay additional assessments based upon the Authority's operating results. Effective July 1, 2015, the Fire District became a member of the Public Agency Risk Sharing Authority of California (Authority) for its workers compensation insurance and concurrently separated from the Public Agency Self -Insurance System (PASIS) of San Bernardino County. The Fire District will maintain reserves to cover its June 30, 2020, estimated claims liability for workers compensation up to its self -insured retention of $250,000. Claims in excess of the self -insured amount will be covered by California State Association of Counties- Excess Insurance Authority. All workers compensation coverage from July 1, 2015, forward will be provided by the Authority. Under the program, the Fire District has a $250,000 retention limit for workers compensation. The Authority covers workers compensation claims in excess of the $250,000 retention limit up to $5,000,000. The Local Agency Workers Compensation Excess Pool provides excess coverage to statutory limits. The Fire District pays an annual premium to the Authority and may share in any surplus revenues or may be required to pay additional assessments based upon the Authority's operating results. Financial statements of the Public Agency Risk Sharing Authority of California (PARSAC) may be obtained from its administrative office located at 1525 Response Road, Suite One, Sacramento, California, 95815; www.parsac.org; or by calling (916) 927-7727. 95 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 14: Summary Disclosure of Self -Insurance Contingencies (Continued) The City and the Fire District are involved in litigation arising in the normal course of business. Although the legal responsibility and financial impact with respect to such litigation cannot be presently ascertained, based on information from the service agent and others involved with the administration of the programs, the City believes that the self-insurance commitment of $8,831,778 is adequate to cover such losses. The liability will be paid as it becomes due by the General Fund and the Fire District Fund. The following is a summary of the changes in the claims liability over the past two fiscal years for the City and the Fire District combined: Current Year Claims Fiscal Year Beginning and Changes in Claim Ending Ended Balance Estimates Payments Balance June 30, 2019 $ 3,518,873 $ 1,439,791 $ (1,865,020) $ 3,093,644 June 30, 2020 3,093,644 971,210 (1,344,028) 2,720,826 Note 15: Commitments and Contingencies The following schedule summarizes the major contractual commitments as of June 30, 2020: Project Name Fiber Optic Network Storm Drain Hellman Ate. to Amethyst Aw. on 19th St. Public Safety Facility Expenditures to date as of June Contract Amount 30, 2020 $ 11,021,475 $ 1,913,121 3,221,680 12,997 16,613,219 7,239,502 Remaining Commitments $ 9,108, 353 3,208,683 9,373,717 101 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 16: Fund Balance Classifications Fund balances are presented in the following categories: nonspendable, restricted, committed, assigned, and unassigned (see Note 1 for a description of these categories). A detailed schedule of fund balances at June 30, 2020, is as follows: Special Revenue Funds Other Development Lighting Housing Governmental General Fund Impact Fees Districts Successor Agency Fire District Funds Total Nonspendable: Prepaid costs $ 312,787 $ 300 $ $ 3,372 $ 203,218 $ 3,985 $ 523,662 Deposits 20,000 - - 20,000 Advances to other funds 14,565,690 - 14,565,690 Total Nonspendable 14,898,477 300 3,372 203,218 3,985 15,109,352 Restricted for: Community development projects - 8,194,692 139,690,123 - 2,719,594 150,604,409 Public safety - police 635,130 - 1,100,634 1,735,764 Parks and recreation 7,716,134 138,679 7,854,813 Engineering and public works 45,979,526 - 24,797,213 70,776,739 Capital improvement projects 3,929,377 878,524 7,656,655 30,207,379 42,671,935 Underground utilities - 11,357,456 11,357,456 Landscape maintenance - 21,356,571 21,356,571 Library services - 844,965 8,516,819 9,361,784 Technology replacement 1,778,479 - 25,195 - 1,803,674 General plan update 742,296 164,216 - 906,512 Contractual obligations 2,600,102 41,710 2,641,812 PERS rate stabilization 3,533,569 10,068,865 13,602,434 SI31186 certified access specialist services 136,516 - 136,516 Total Restricted 12,720,339 64,413,187 139,690,123 17,792,425 100,194,345 334,810,419 Committed to: Law enforcement 4,048,170 - - - - 4,048,170 Vehicle and equipment replacement 3,569,454 3,569,454 Working capital 4,505,225 20,964,388 25,469,613 City facilities capital repair 28,775,336 - 28,775,336 Changes in economic circumstances 18,406,176 9,128,022 27,534,198 Employee leave payouts 3,673,373 4,082,530 7,755,903 Self insurance 8,831,778 - 8,831,778 Fire District facilities capital repair - 3,129,171 3,129,171 PASIS worker's compensation tail claims - 601,288 601,288 Total Committed 68,240,058 41,474,853 109,714,911 Assigned to: 800 MHz radio system replacement 550,697 2,005,044 2,555,741 City infrastructure 15,465,572 - 15,465,572 Capital projects - 18,715,196 18,715,196 Annexation, habitat mitigation and sphere 658,604 - 658,604 of influence issues Animal Center operations 450,354 450,354 Community development projects 1,971,103 1,971,103 Healthy RC 12,940 12,940 Mobile home park program 190,335 190,335 Fiber master plan 3,249,044 3,249,044 Continuing operations 221,359 152,252 373,611 Community services programs 2,208,443 - 2,208,443 Total Assigned 24,978,451 20,872,492 45,850,943 Unassigned (4,886,654) (12,506) (4,899,160) Totals $ 120,837,325 $ 64,413,487 $ (4,886,654) $ 139,693,495 $ 80,342,988 $ 100,185,824 $ 500,586,465 97 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 17: Successor Agency Trust for Assets of Former Redevelopment Agency On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 ("the Bill") that provides for the dissolution of all redevelopment agencies in the State of California. This action impacted the reporting entity of the City of Rancho Cucamonga that previously had reported a redevelopment agency within the reporting entity of the City as a blended component unit. The Bill provides that upon dissolution of a redevelopment agency, either the city or another unit of local government will agree to serve as the "successor agency" to hold the assets until they are distributed to other units of state and local government. On January 11, 2012, the City elected to become the Successor Agency for the former redevelopment agency in accordance with the Bill as part of City resolution number 12-001. After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the State of California cannot enter into new projects, obligations or commitments. Subject to the control of a newly established oversight board, remaining assets can only be used to pay enforceable obligations in existence at the date of dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments). In future fiscal years, successor agencies will only be allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of the former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been liquidated. The Bill directs the State Controller of the State of California to review the propriety of any transfers of assets between redevelopment agencies and other public bodies that occurred after January 1, 2011. If the public body that received such transfers is not contractually committed to a third party for the expenditure or encumbrance of those assets, the State Controller is required to order the available assets to be transferred to the public body designated as the successor agency by the Bill. Management believes, in consultation with legal counsel, that the obligations of the former redevelopment agency due to the City are valid enforceable obligations payable by the successor agency trust under the requirements of the Bill. The City's position on this issue is not a position of settled law and there is considerable legal uncertainty regarding this issue. It is reasonably possible that a legal determination may be made at a later date by an appropriate judicial authority that would resolve this issue unfavorably to the City. In accordance with the timeline set forth in the Bill (as modified by the California Supreme Court on December 29, 2011) all redevelopment agencies in the State of California were dissolved and ceased to operate as a legal entity as of February 1, 2012. CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 17: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) a. Cash and investments Cash and investments reported in the accompanying financial statements consisted of the following: Cash and investments $ 22,814,098 Cash and investments with fiscal agent 8,026 $ 22, 822,124 b. Loans Receivable Notes and loans receivables consist of the following at June 30, 2020: On July 21, 2003, the Agency entered into a Disposition and Developer Agreement with Victoria Gardens, LLC. The Agency conveyed 147 acres generally located north of Foothill Boulevard, west of the 1-15 Freeway and east of Day Creek Road in the City of Rancho Cucamonga in order for the Developer to construct an open air mixed use complex. The Agency conveyed the site to the Developer upon the execution of a promissory note to pay a cumulative sum of $13,000,000 to the Agency over a term of thirty (30) years. The note stipulates the following payment structure: (1) the Developer shall make annual payments to the Agency equal to the amount required to amortize the excess return at the Agency's cost of funds; (2) the Developer shall pay the Agency fifteen percent (15%) of the difference between the net sale proceeds and the higher of the project cost, or the initial gross proceeds of any loan; and (3) the Developer shall pay the Agency fifteen percent (15%) of any positive net refinance proceeds. As of June 30, 2020, the outstanding balance was $10,550,742. c. Long -Term Debt A description of long-term debt outstanding (excluding defeased debt) of the Successor Agency as of June 30, 2020, follows: Balance Balance Due Within July 1, 2019 Additions Repayments June 30, 2020 One Year Tax Allocation Bonds Tax Allocation Refunding Bonds - 2007 Issue $ 60,260,000 $ $ 2,530,000 $ 57,730,000 $ 2,685,000 Tax Allocation Refunding Bonds - 2014 Issue 147,930,000 7,550,000 140,380,000 7,925,000 Tax Allocation Refunding Bonds - 2016 Issue 53,360,000 1,665,000 51,695,000 1,735,000 Total Bonds 261,550,000 11,745,000 249,805,000 12,345,000 Developer Loans Bank of New York 7,207,390 784,030 6,423,360 854,379 Total Developer Loans 7,207,390 784,030 6,423,360 854,379 Total $ 268, 757, 390 $ $ 12, 529, 030 256, 228, 360 $ 13,199, 379 Unamortized Premium 23,715,173 Total $ 279,943,533 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 17: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) Tax Allocation Bonds Rancho Cucamonga Redevelopment Agency, Rancho Redevelopment Project, Housing Set -aside Tax Allocation Bonds, Tax Exempt Series 2007A and Taxable Series 2007B. $155,620,000. In November 2007, the Rancho Cucamonga Redevelopment Agency issued $73,305,000 Rancho Redevelopment Project Housing Set -Aside Tax Allocation Bonds Tax -Exempt Series 2007A and $82,315,000 Rancho Redevelopment Project Housing Set -Aside Tax Allocation Bonds Taxable series 2007B to (a) refund and redeem the Agency's outstanding Rancho Redevelopment Project 1996 Housing Set -Aside Tax Allocation Bonds, provide for the refunding and defeasance of the California Statewide Communities Development Authority Multifamily Housing Revenue Bonds, (c) extend set -aside and affordability restriction on 558 units within four apartment projects located in the City of Rancho Cucamonga pursuant to an Extended Affordability Agreement, and (d) finance other low and moderate income housing projects in or of benefit to the Project Area. The Series A issue consists of $29,950,000 in Serial bonds with maturities beginning September 1, 2008 through September 1, 2026, bearing interest ranging from 3.25% through 5.0%; and $43,355,000 in Term bonds due September 1, 2034, bearing interest at 5%. The Series B issue consists of $19,675,000 Term bonds due September 1, 2018, bearing interest at 5.529%; and $62,640,000 Term bonds due September 1, 2031, bearing interest at 6.262%. Interest on both Series A and B bonds is payable semi-annually on March 1 and September 1 of each year, commencing March 1, 2008. The 2007 bonds are secured and payable from Tax Revenues on a subordinate basis with respect to a Loan Agreement dated as of December 15, 1997, between the Agency, Northtown Housing Development Corporation and Pacific Life Insurance Company (Loan Payable -Bank of New York) — the Senior Loan. The Indenture does not permit additional senior obligations. The Agency is permitted under the Indenture to incur additional obligations — Parity Bonds — secured by a pledge of Tax Revenues on a parity basis with the pledge of Tax Revenues to the 2007 Bonds. Tax Revenues which secure the 2007 Bonds consist solely of the Housing Set -Aside. On July 20, 2016, the Successor Agency issued Tax Allocation Refunding Bonds, Series 2016 to refund the Series A. The refunding resulted in the recognition of an accounting loss of $2,716,427, however it reduced the total debt service payments by $14 million and an economic gain (the difference between the present values of the debt service payments on the old and new debt) of $11 million. The Taxable Series B Bonds are subject to optional redemption, on any date prior to their maturity. 100 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 17: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) The balance at June 30, 2020, amounted to $57,730,000 plus unamortized bond premium of $248,111. The following schedule illustrates the debt service requirements to maturity for the 2007 Tax Allocation Refunding Bonds as of June 30, 2020: Year Ending June 30 Principal Interest 2021 $ 2,685,000 $ 3,530,986 2022 2,855,000 3,357,528 2023 3,040,000 3,172,955 2024 3,225,000 2,976,798 2025 3,430,000 2,768,430 2026-2030 32,795,000 9,120,446 2031-2032 9,700,000 315,917 Total $ 57,730,000 $ 25,243,060 If an Event of Default shall occur, then, and in each and every such case during the continuance of such Event of Default, the Trustee may, with the consent of the Insurer and if requested in writing by the Owners of a majority in aggregate principal amount of the Bonds then Outstanding or if directed by the Insurer, the Trustee shall (a) declare the principal of the Bonds, together with the accrued interest thereon, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable, anything in the Indenture or in the Bonds to the contrary notwithstanding, and (b) subject to the provisions of the Indenture, exercise any other remedies available to the Trustee and the bond owners in law or at equity. 2. Rancho Cucamonga Redevelopment Agency, Rancho Redevelopment Project Area Tax Allocation Refunding Bonds, Series 2014. $174,050,000. These bonds are dated July 15, 2014, and were issued to refinance certain obligations of the Project Area including the 1999 Tax Allocation Refunding Bonds, 2001 Tax Allocation Bonds and 2004 Tax Allocation Bonds. The Bonds will be payable from and secured by, designated property tax revenues (formerly tax increment revenues) related to the Rancho Redevelopment Project, which will consist of moneys deposited, from time to time, in the Redevelopment Property Tax Trust Fund ("RPTTF") established under the Dissolution Act, defined below, but exclude those amounts which were, prior to the Dissolution Act, required to be deposited into the Former Agency's Low and Moderate Income Housing Fund to the extent required to pay debt service on existing Housing Obligations. Interest is payable semi-annually on March 1 and September 1, of each year commencing March 1, 2015. The bonds mature in annual installments ranging from $2,750,000 to $14,235,000 starting September 1, 2015, to September 1, 2032, and bear interest ranging from 3% to 5%. The balance at June 30, 2020, amounted to $140,380,000 plus unamortized bond premium of $17,652,075 and unamortized gain on defeasance of $1,660,347. 101 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 17: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) The following schedule illustrates the debt service requirements to maturity for the 2014 Tax Allocation Refunding Bonds as of June 30, 2020: Year Ending June 30 Principal Interest 2021 $ 7,925,000 $ 6,820,875 2022 8,320,000 6,414,750 2023 8,735,000 5,988,375 2024 9,175,000 5,540,625 2025 9,635,000 5,070,375 2026-2030 55,890,000 17,433,750 2031-2033 40,700,000 3,118,750 Total $ 140,380,000 $ 50,387,500 If an Event of Default has occurred and is continuing, the Trustee may (but only with the consent of the Insurer), and if requested in writing by the Owners of a majority in aggregate principal amount of the Bonds then Outstanding, the Trustee shall (but only with the consent of the Insurer), (a) declare the principal of the Bonds, together with the accrued interest thereon, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable, anything in the Indenture or in the Bonds to the contrary notwithstanding, and (b) exercise any other remedies available to the Trustee and the bond owners in law or at equity. 3. Rancho Cucamonga Redevelopment Agency, Rancho Redevelopment Project Area Tax Allocation Refunding Bonds, Series 2016. $56,860,000. These bonds are dated October 5, 2016, and were issued to refinance certain obligations of the Rancho Redevelopment Project Housing Set -Aside Tax Allocation Bonds 2007 Series A. The Bonds will be payable from and secured by, designated property tax revenues (formerly tax increment revenues) related to the Rancho Redevelopment Project, which will consist of moneys deposited, from time to time, in the Redevelopment Property Tax Trust Fund ("RPTTF") established under the Dissolution Act, but exclude those amounts which were, prior to the Dissolution Act, required to be deposited into the Former Agency's Low and Moderate Income Housing Fund to the extent required to pay debt service on existing Housing Obligations. Interest is payable semi-annually on March 1 and September 1, of each year commencing March 1, 2017. The bonds mature in annual installments ranging from $1,615,000 to $10,060,000 starting September 1, 2017, to September 1, 2034, and bear interest ranging from 2% to 5%. The balance at June 30, 2020, amounted to $51,695,000 plus unamortized bond premium of $5,814,987 and unamortized loss on defeasance of $2,250,754. 102 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 17: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) The following schedule illustrates the debt service requirements to maturity for the 2016 Tax Allocation Refunding Bonds as of June 30, 2020: Year Ending June 30 Principal Interest 2021 $ 1,735,000 $ 2,136,500 2022 1,800,000 2,065,800 2023 1,870,000 1,983,050 2024 1,965,000 1,887,175 2025 2,060,000 1,786,550 2026-2030 4,445,000 7,788,875 2031-2035 37,820,000 4,622,600 Total $ 51,695,000 $ 22,270,550 If an Event of Default has occurred and is continuing, the Trustee may (but only with the consent of the Insurer), and if requested in writing by the Owners of a majority in aggregate principal amount of the Bonds then Outstanding the Trustee shall (but only with the consent of the Insurer), (a) declare the principal of the Bonds, together with the accrued interest thereon, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable, anything in the Indenture or in the Bonds to the contrary notwithstanding, and (b) exercise any other remedies available to the Trustee and the bond owners on law or at equity. Developer Loans Payable On August 21, 1996, the Agency executed a note payable to Pacific Life Insurance Company (subsequently assigned to Bank of New York) in the amount of $9,411,477. The proceeds of the note were paid directly to Northtown Housing Development Corporation for the development of the Northtown Housing project. The outstanding principal bears interest at 8.78% compounding semi-annually from the date of the note until paid. Interest was added to the principal on each March 15 and September 15 through March 15, 2002, amounting to $4,210,264 in addition to principal. Commencing on September 15, 2002, both principal and interest shall be due and payable semi-annually on March 20 and September 20, of each year through March 2026. The balance at June 30, 2020, amounted to $6,423,360. The following schedule illustrates the debt service requirements to maturity for the Bank of New York loan as of June 30, 2020: Year Ending June 30 Principal Interest 2021 $ 854,379 $ 545,621 2022 931,041 468,959 2023 1,014,580 385,420 2024 1,105,615 294,385 2025 1,204,820 195,180 2026 1,312,925 87,075 Total $ 6,423,360 $ 1,976,640 All outstanding principal and interest due under this note shall be due and payable in full on the earliest to occur of: March 15, 2026, or the date of an event of default. 103 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 17: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) Pledged Revenue The City pledged, as security for bonds issued, either directly or through the Financing Authority, a portion of tax increment revenue (including Low and Moderate Income Housing set -aside and pass through allocations) that it receives. The bonds issued were to provide financing for various capital projects, accomplish Low and Moderate Income Housing projects and to defease previously issued bonds. Assembly Bill 1 X 26 provided that upon dissolution of the Redevelopment Agency, property taxes allocated to redevelopment agencies no longer are deemed tax increment but rather property tax revenues and will be allocated first to successor agencies to make payments on the indebtedness incurred by the dissolved redevelopment agency. Total principal and interest remaining on the debt is $356,106,110 with annual debt service requirements as indicated above. For the current year, the total property tax revenue recognized by the City for the payment of indebtedness incurred by the dissolved redevelopment agency was $27,643,720 and the debt service obligation on the bonds was $26,251,517. In July 1994, the Agency entered into an affordable housing Pledge Agreement with So Cal Housing which they could use to secure affordable housing units. In August 1996, the Agency approved Amendment No. 2 to the 1994 Original Pledge, to commit to pay $339,200 annually to the California Housing Finance Agency (CHFA) to benefit the required reserves for three affordable family housing developments up to November 2026. The balance of the commitment at June 30, 2020, is $2,204,800. d. Insurance The Successor Agency is covered under the City of Rancho Cucamonga's insurance policies. Therefore, the limitation and self -insured retentions applicable to the City also apply to the Successor Agency. Additional information as to coverage and self -insured retentions can be found in Note 12. e. Participation Agreements In August 2005, the Agency entered into a real estate tax, sales tax, tax increment and business license tax participation agreement with Bass Outdoor World, LLC (Bass Pro), 80 VGL, LLC and 20 VGL, LLC (80 VGL, LLC and 20 VGL, LLC are collectively referred to as Landlord). Under the terms of the agreement, the Agency is required to make annual payments equal to one hundred percent (100%) of the tax increment revenues, sales tax revenues and business license tax paid during each year. However, Landlord has the priority for reimbursements of real estate taxes paid for each year prior to any payments being made to Bass Pro. The total amount paid to Landlord and Bass Pro shall not exceed $1,100,000 in any given year. The agreement terminates in fiscal year 2032-2033. However, due to ERAF payment made, the agreement was extended to December 2034. During the year ended June 30, 2020, the Agency made payments totaling $602,713. 104 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2020 Note 18: Subsequent Event On March 27, 2020, in response to the economic fallout of the Coronavirus pandemic in the United States, Congress passed the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, which provided $2.2 trillion in economic stimulus funding through a variety of channels. The State of California received a $500 million allocation to provide funding to cities that did not receive a direct federal allocation through the CARES Act. On July 1, 2020, the City entered into an agreement with the State of California to receive their allocation of the CARES Act funding. The funding is to be received in installments, with the first installment received by the City in July 2020 and the final installment in October 2020. Under the formula identified in the 2020 Budget Act, the City was allocated $2,167,193. On September 29, 2020, the San Bernardino County Board of Supervisors approved an allocation of $23.3 million to cities within the County. These funds are meant to reimburse cities for costs incurred since the start of the pandemic. The County used the 2020 Budget Act formula, and the City was allocated $2,167,193 through this program. Additionally, the Fire District was allocated $176,850 for eligible expenditures incurred through participation in the multi -agency Incident Management Team. 105 THIS PAGE INTENTIONALLY LEFT BLANK 1: REQUIRED SUPPLEMENTARY INFORMATION 107 THIS PAGE INTENTIONALLY LEFT BLANK 108 CITY OF RANCHO CUCAMONGA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2020 Budgetary Comparison Information a. Budget Data General Budaet Policies The annual budget adopted by the City Council provides for the general operation of the City. It includes proposed expenditures and the means of financing them. The City Council approves each year's budget submitted by the City Manager prior to the beginning of the new fiscal year. The Council conducts budget study sessions prior to holding a public hearing to adopt the budget. When required during the fiscal year, the Council also approves supplemental appropriations. There were several supplemental appropriations required during the year. A comprehensive update to budgeted figures occurs once per year as part of the Amended Budget process which is presented to the Council in May each fiscal year for approval. There were no significant non - budgeted financial activities during the year. The City Council may transfer funds between funds or activities set forth in the budget. The City Manager may transfer funds between line items within an appropriation as set forth in the budget and may transfer appropriations between activities within any fund. The level of budgetary control (that is the level at which expenditures cannot legally exceed the appropriated amount) is established at the fund level within the General Fund, Special Revenue Funds, and Capital Project Funds. Encumbrances Encumbrances are estimations of costs related to unperformed contracts for goods and services. They represent the estimated amount of the expenditure ultimately to result if unperformed contracts in process at year-end are completed. They do not constitute expenditures or estimated liabilities. Basis of Budgeting Budgets for governmental funds are adopted on a basis consistent with generally accepted accounting principles (GAAP) except that for budgeting purposes only encumbrances are treated as expenditures. A reconciliation has been provided on the applicable schedule when the basis of budgeting differs from GAAP. For the fiscal year ended June 30, 2020, the SB 140 fund and the Energy Efficient and Conservation Block Grant fund had no adopted annual budgets due to the timing of the usage of these funds. Money will be budgeted as needed based on specific projects. 109 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) GENERALFUND YEAR ENDED JUNE 30, 2020 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Licenses and permits Intergovernmental Charges for services Use of money and property Fines and forfeitures Contributions Miscellaneous Transfers in Proceeds from sale of capital asset Amounts Available for Appropriations Charges to Appropriations (Outflow): General government General overhead Personnel overhead City council City management City clerk Administrative services Business licensing City facilities Finance Innovation and technology Personnel Procurement Risk management Treasury management Communications Records management Healthy RC Program Public safety - police Sheriff contract services Public safety - animal center Animal center Community development Planning Planning commission Community improvement Administration Building and safety Community services Administration Engineering and public works Engineering administration Development management NPDES Project management Traffic management Park maintenance Vehicle and equipment maintenance City facilities maintenance Street maintenance Fire facilities maintenance Capital outlay Debt service: Interest and fiscal charges Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 118,780,845 $ 118,780,845 $ 118,780,845 $ 73,689,370 69,140,820 69,874,727 733,907 4,366,180 4,792,070 5,398,038 605,968 622,580 591,670 711,951 120,281 4,144,960 4,806,150 5,173,453 367,303 1,671,870 2,181,040 2,725,049 544,009 1,495,680 1,041,620 764,796 (276,824) 125,160 124,000 84,534 (39,466) 2,838,400 3,347,990 3,443,205 95,215 1,726,150 3,936,360 3,861,606 (74,754) 50,070 82,700 75,954 (6,746) 209,511,265 208,825,265 210,894,158 2,068,893 3,492,720 3,540,770 2,906,814 633,956 1,036,070 1,151,140 1,173,607 (22,467) 118,110 114,800 114,756 44 991,920 956,750 955,993 757 1,960 2,070 2,057 13 277,430 284,220 277,358 6,862 369,680 377,580 366,518 11,062 1,062,520 957,380 808,860 148,520 1,507,700 1,371,930 1,371,303 627 4,067,690 3,838,110 3,718,696 119,414 735,110 703,700 637,786 65,914 274,510 224,050 221,495 2,555 282,440 281,150 242,889 38,261 12,420 12,310 12,079 231 236,420 213,980 181,514 32,466 505,450 489,410 489,351 59 628,910 639,460 639,422 38 42,913,360 43,205,330 40,951,248 2,254,082 3,416,210 3,138,810 3,031,419 107,391 1,793,550 2,157,440 2,094,706 62,734 17,280 16,470 14,045 2,425 759,570 704,000 668,993 35,007 1,464,010 3,899,230 3,854,381 44,849 1,959,190 1,874,910 1,846,469 28,441 5,562,050 4,730,520 4,401,161 329,359 682,430 589,510 585,258 4,252 1,106,870 904,610 903,157 1,453 381,340 378,790 378,724 66 603,800 549,620 516,044 33,576 255,720 211,020 210,052 968 3,291,770 2,998,740 2,789,019 209,721 1,127,540 1,072,300 1,048,983 23,317 3,997,670 3,676,230 3,314,420 361,810 2,414,140 2,429,460 2,190,406 239,054 356,160 235,670 235,652 18 3,972,000 9,611,780 9,247,368 364,412 11,980 9,200 9,196 4 4,726,720 4,526,870 4,395,177 131,693 96,414,420 102,079,320 96,806,376 5,272,944 $ 113,096,845 $ 106,745,945 114,0879782 $ 7,3419837 6,749,543 Budgetary Fund Balance, June 30 (GAAP Basis) $ 120,837,325 110 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) DEVELOPMENT IMPACT FEES YEAR ENDED JUNE 30, 2020 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Charges for services Use of money and property Developer participation Amounts Available for Appropriations Charges to Appropriation (Outflow): Public safety - police Public safety - animal services Community development Community services Engineering and public works Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 55,817,514 $ 55,817,514 $ 55,817,514 $ - - - 296,647 296,647 232,180 232,180 297,865 65,685 874,420 1,118,840 1,619,353 500,513 4,110,730 4,610,730 8,262,733 3,652,003 61,034,844 61,779,264 66,294,112 4,514,848 960 960 745 215 720 720 559 161 168,720 153,750 115,518 38,232 58,840 58,840 45,824 13,016 738,260 587,340 587,303 37 8,547,500 11,039,460 8,003,982 3,035,478 9,515,000 11,841,070 8,753,931 3,087,139 $ 51,519,844 $ 49,938,194 57,540,181 $ 7,601,987 6,873,306 $ 64,413,487 111 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) LIGHTING DISTRICTS YEAR ENDED JUNE 30, 2020 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Use of money and property Developer participation Miscellaneous Transfers in Amounts Available for Appropriations Charges to Appropriation (Outflow): General government Capital outlay Debt service: Interest and fiscal charges Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $(5,587,105) $ (5,587,105) $ (5,587,105) $ - 2,098,570 2,098,570 2,105,600 7,030 102,800 109,470 159,961 50,491 2,430 2,430 - (2,430) - - 154,233 154,233 368,170 457,900 457,900 - (3,015,135) (2,918,735) (2,709,411) 209,324 1,912,150 2,069,930 1,993,273 76,657 - 124,880 120,378 4,502 119,030 119,030 118,990 40 2,031,180 2,313,840 2,232,641 81,199 $(5,046,315) $ (5,232,575) (4,942,052) $ 290,523 Fr lap $ (4,886,654) 112 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) HOUSING SUCCESSOR AGENCY YEAR ENDED JUNE 30, 2020 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Miscellaneous Amounts Available for Appropriations Charges to Appropriation (Outflow): Community development Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 139,933,044 $ 139,933,044 $ 139,933,044 $ 154,560 63,420 129,136 65,716 12,000 95,500 95,471 (29) 140,099,604 140,091,964 140,157,651 65,687 462,210 464,170 464,156 14 200,000 933,620 - 933,620 662,210 1,397,790 464,156 933,634 $ 139,437,394 $ 138,694,174 139,693,495 $ 999,321 Budgetary Fund Balance, June 30 (GAAP Basis) $ 139,693,495 113 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) FIRE DISTRICT YEAR ENDED JUNE 30, 2020 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Licenses and permits Intergovernmental Charges for services Use of money and property Fines and forfeitures Miscellaneous Transfers in Proceeds from sale of capital asset Amounts Available for Appropriations Charges to Appropriation (Outflow): Public safety - fire protection Capital outlay Debt service: Interest and fiscal charges Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 76,043,480 $ 76,043,480 $ 76,043,480 $ 42,612,430 42,786,740 42,496,886 (289,854) 16,500 16,500 6,516 (9,984) - 14,000 14,000 5,820 1,900 684 (1,216) 1,072,630 1,300,890 2,369,252 1,068,362 118,000 95,000 194,207 99,207 1,589,060 1,742,270 1,229,829 (512,441) - 29,670 29,665 (5) - 23,280 23,276 (4) 121,457,920 122,053,730 122,407,795 354,065 35,307,140 37,882,600 35,575,221 2,307,379 3,960,500 16,199,860 14,171,455 2,028,405 63,200 63,200 63,196 4 - 105,500 105,494 6 39,330,840 54,251,160 49,915,366 4,335,794 $ 82,127,080 $67,802,570 72,492,429 $ 4,689,859 7,850,559 $ 80,342,988 114 CITY OF RANCHO CUCAMONGA MISCELLANEOUS PLAN -AGENT MULTIPLE -EMPLOYER SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1) 2015 2016 2017 2018 2019 2020 TOTAL PENSION LIABILITY Service Cost $ 4,661,973 $ 4,342,707 $ 4,193,507 $ 4,743,810 $ 4,869,644 $ 4,749,046 Interest 12, 370, 506 12,931,479 13,651, 750 14, 301, 966 15,134, 775 16, 072, 077 Difference between Expected and Actual Experience - (3,882,722) (1,557,585) (1,926,722) (1,496,029) - Changes in Assumptions (3,352,733) - 12,495,866 2,212,199 2,512,596 Benefit Payments, Including Refunds of Employee Contributions (5,229,846) (5,847,197) (6,606,205) (7,626,368) (8,728,016) (9,967,183) Net Change in Total Pension Liability 11,802,633 4,191,534 9,681,467 21,988,552 11,992,573 13,366,536 Total Pension Liability - Beginning 165,224,012 177,026,645 181,218,179 190,899,646 212,888,198 224,880,771 Total Pension Liability - Ending (a) $ 177,026,645 $ 181,218,179 $ 190,899,646 $ 212,888,198 $ 224,880,771 $ 238,247,307 PLAN FIDUCIARY NET POSITION Contributions -Employer $ 3,520,721 $ 3,433,074 $ 3,745,698 $ 4,207,753 $ 4,622,851 $ 5,133,141 Contributions -Employee 2,156,312 2,074,191 2,120,443 2,150,126 2,032,448 1,976,074 Net Investment Income 21,772,350 3,320,843 782,082 16,691,043 13,809,497 11,584,539 Benefit Payments, Including Refunds of Employee Contributions (5,229,846) (5,847,197) (6,606,205) (7,626,368) (8,728,016) (9,967,183) Administrative Expense (168,508) (91,249) (220,985) (256,923) (126,024) Net Plan to Plan Resource Movement (407) - Other Miscellaneous Income/(Expense) 242,458 407 Net Change in Fiduciary Net Position 22,219,537 2,812,403 (49,231) 15,201,569 11,721,908 8,600,954 Plan Fiduciary Net Position - Beginning 124,692,088 146,911,625 149,724,028 149,674,797 164,876,366 176,598,274 Plan Fiduciary Net Position - Ending (b) $ 146,911,625 $ 149,724,028 $ 149,674,797 $ 164,876,366 $ 176,598,274 $ 185,199,228 Plan Net Pension Liability/(Assets) - Ending (a) - (b) $ 30,115,020 $ 31,494,151 $ 41,224,849 $ 48,011,832 $ 48,282,497 $ 53,048,079 Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 82.99% 82.62% 78.40% 77.45% 78.53% 77.73% Covered Payroll $ 25,819,515 $ 25,082,858 $ 25,682,090 $ 26,459,567 $ 27,268,038 $ 27,077,712 Plan Net Pension Liability/(Asset) as a Percentage of Covered Payroll 116.64% 125.56% 160.52% 181.45% 177.07% 195.91% (1) Historical information is required only for measurement years for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only six years are shown. Notes to Schedule: Benefit Changes: There were no changes to benefit terms. However, the figures above do not include any liability impact that may have resulted from plan changes which occurred after the measurement dates. This applies for voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes). Changes of Assumptions: In 2019, there were no changes. In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions December 2017. There were no changes in discount rate in 2018. In 2017, the accounting discount rate reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense.) In 2014, amounts reported were based on the 7.5 percent discount rate. 115 CITY OF RANCHO CUCAMONGA MISCELLANEOUS PLAN - AGENT MULTIPLE -EMPLOYER SCHEDULE OF PLAN CONTRIBUTIONS AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1) 2015 2016 2017 2018 2019 2020 Actuarially Determined Contribution $ 3,433,074 $ 3,745,756 $ 4,192,505 $ 4,642,132 $ 5,135,066 $ 5,862,979 Contribution in Relation to the Actuarially Determined Contribution (3,433,074) (3,745,756) (4,192,505) (4,642,132) (5,135,066) (5,862,979) Contribution Deficiency (Excess) $ $ - $ - $ - $ - $ Covered Payroll $ 25,082,858 $ 25,682,090 $ 26,459,567 $ 27,268,038 $ 27,077,712 26,743,856 Contributions as a Percentage of Covered Payroll 13.69% 14.59% 15.84% 17.02% 18.96% 21.92% (1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only six years are shown. Note to Schedule: Valuation Date: June 30, 2018 Methods and assumptions used to determine contribution rates: Actuarial Cost Method Entry Age Normal Cost Method Amortization method Level percentage of payroll, closed Asset valuation method Direct rate smoothing Inflation 2.50% Payroll Growth 2.75% Projected Salary Increases Varies by Entry Age and Service Investment Rate of Return 7.00% (net of administrative expenses) Retirement Age All other actuarial assumptions used in the June 30, 2018 valuation were based on the results of an actuarial experience study for the period from 1997 to 2015, including updates to salary increase, mortality and retirement rates. The Experience Study report may be accessed on the CaIPERS website at www.calpers.ca.gov under Forms and Publications. Mortality The mortality table used was developed based on CaIPERS' specific data. The table includes 15 years of mortality improvements using 90 percent of Society of Actuaries' Scale 2016. For more details on this table, please refer to the 2017 experience study report. 116 CITY OF RANCHO CUCAMONGA COST SHARING MULTIPLE -EMPLOYER PLAN - MISCELLANEOUS RATE PLAN SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1) Proportion of the Net Pension Liability Proportionate Share of the Net Pension Liability Covered Payroll Proportionate Share of the Net Pension Liability as Percentage of Covered Payroll Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 2015 2016 2017 2018 2019 2020 0.02166% 0.02652% 0.06568% 0.06723% 0.06897% 0.07095% $ 1,348,194 $ 1,819,909 $ 2,281,501 $ 2,650,258 $ 2,599,301 $ 2,841,232 $ 1,474,657 $ 1,437,227 $ 1,524,047 $ 1,577,007 $ 1,619,191 $ 1,593,099 91.42% 126.63% 149.70% 168.06% 160.53% 178.35% 79.82% 78.40% 75.87% 75.39% 77.69% 77.73% Notes to Schedule: Benefit Changes: There were no changes to benefit terms. However, the figures above do not include any liability impact that may have resulted from plan changes which occurred after the measurement dates. This applies for voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes). Changes of Assumptions: In 2019, there were no changes. In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions December 2017. There were no changes in discount rate in 2018. In 2017, the accounting discount rate reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense.) In 2014, amounts reported were based on the 7.5 percent discount rate. (1) Historical information is required only for measurement years for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only six years are shown. 117 CITY OF RANCHO CUCAMONGA COST SHARING MULTIPLE -EMPLOYER PLAN - MISCELLANEOUS RATE PLAN SCHEDULE OF PLAN CONTRIBUTIONS AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1) 2015 2016 2017 2018 2019 2020 Actuarially Determined Contribution $ 210,430 $ 219,901 $ 238,202 $ 254,681 $ 283,247 $ 332,407 Contribution in Relation to the Actuarially Determined Contribution (210,430) (219,901) (238,202) (254,681) (283,247) (332,407) Contribution Deficiency (Excess) $ - $ - $ - $ - $ - $ Covered Payroll $ 1,437,227 $ 1,524,047 $ 1,577,007 $ 1,619,191 $ 1,593,099 $ 1,771,563 Contributions as a Percentage of Covered Payroll 14.64% 14.43% 15.10% 15.73% 17.78% 18.76% (1) Historical information is required only for measurement years for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only six years are shown. Note to Schedule: Valuation Date: June 30, 2018 Methods and assumptions used to determine contribution rates: Actuarial Cost Method Entry Age Normal Cost Method Amortization method Level percentage of payroll, closed Asset valuation method Direct rate smoothing Inflation 2.50% Payroll Growth 2.75% Projected Salary Increases Varies by Entry Age and Service Investment Rate of Return 7.00% (net of administrative expenses) Retirement Age All other actuarial assumptions used in the June 30, 2018 valuation were based on the results of an actuarial experience study for the period from 1997 to 2015, including updates to salary increase, mortality and retirement rates. The Experience Study report may be accessed on the CalPERS website at www.calpers.ca.gov under Forms and Publications. Mortality The mortality table used was developed based on CalPERS' specific data. The tabe includes 15 years of mortality improvements using 90 percent of Society of Actuaries' Scale 2016. For more details on this table, please refer to the 2017 experience study report. 118 CITY OF RANCHO CUCAMONGA COST SHARING MULTIPLE -EMPLOYER PLAN - SAFETY RATE PLAN SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1) Proportion of the Net Pension Liability Proportionate Share of the Net Pension Liability Covered Payroll Proportionate Share of the Net Pension Liability as Percentage of Covered Payroll Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 2015 2016 2017 2018 2019 2020 0.31131% 0.33146% 0.57027% 0.57286% 0.59184% 0.60633% $ 19,373,864 $ 22,750,560 $ 29,535,666 $ 34,229,524 $ 34,726,501 $ 37,850,274 $ 10,396,960 $ 10,554,523 $ 11,373,722 $ 11,451,394 $ 11,663,014 $ 12,029,495 186.34% 215.55% 259.68% 298.91% 297.75% 314.65% 79.82% 78.40% 72.69% 71.74% 73.39% 73.37% Notes to Schedule: Benefit Changes: There were no changes to benefit terms. However, the figures above do not include any liability impact that may have resulted from plan changes which occurred after the measurement dates. This applies for voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes). Changes of Assumptions: In 2019, there were no changes. In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions December 2017. There were no changes in discount rate in 2018. In 2017, the accounting discount rate reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense.) In 2014, amounts reported were based on the 7.5 percent discount rate. (1) Historical information is required only for measurement years for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only six years are shown. 119 CITY OF RANCHO CUCAMONGA COST SHARING MULTIPLE -EMPLOYER PLAN - SAFETY RATE PLAN SCHEDULE OF PLAN CONTRIBUTIONS AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1) 2015 2016 2017 2018 2019 2020 Actuarially Determined Contribution $ 2,827,842 $ 3,007,980 $ 3,273,056 $ 3,577,900 $ 4,101,079 $ 4,727,134 Contribution in Relation to the Actuarially Determined Contribution (2,827,842) (3,007,980) (3,273,056) (3,577,900) (4,101,079) (4,727,134) Contribution Deficiency (Excess) $ - $ - $ - $ - $ - $ Covered Payroll $10,554,523 $ 11,373,722 $ 11,451,394 $11,663,014 $12,029,495 $12,348,120 Contributions as a Percentage of Covered Payroll 26.79% 26.45% 28.58% 30.68% 34.09% 38.28% (1) Historical information is required only for measurement years for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only six years are shown. Note to Schedule: Valuation Date: June 30, 2018 Methods and assumptions used to determine contribution rates: Actuarial Cost Method Entry Age Normal Cost Method Amortization method Level percentage of payroll, closed Asset valuation method Direct rate smoothing Inflation 2.50% Payroll Growth 2.75% Projected Salary Increases Varies by Entry Age and Service Investment Rate of Return 7.00% (net of administrative expenses) Retirement Age All other actuarial assumptions used in the June 30, 2018 valuation were based on the results of an actuarial experience study for the period from 1997 to 2015, including updates to salary increase, mortality and retirement rates. The Experience Study report may be accessed on the CaIPERS website at www.calpers.ca.gov under Forms and Publications. Mortality The mortality table used was developed based on CalPERS' specific data. The tabe includes 15 years of mortality improvements using 90 percent of Society of Actuaries' Scale 2016. For more details on this table, please refer to the 2017 experience study report. 120 CITY OF RANCHO CUCAMONGA PARS RETIREMENT ENHANCEMENT PLAN SCHEDULE OF CHANGES IN NET PENSION LIABILITY/(ASSET) AND RELATED RATIOS AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1) TOTAL PENSION LIABILITY Service Cost Interest Changes of Benefits Terms Difference Between Expected and Actual Experience Changes in Assumptions Changes in Benefit Terms Benefit Payments, Including Refunds of Employee Contributions Net Change in Total Pension Liability Total Pension Liability - Beginning Total Pension Liability - Ending (a) PLAN FIDUCIARY NET POSITION Contribution - Employer Net Investment Income Benefit Payments, Including Refunds of Employee Contributions Other Changes in Fiduciary Net Position Net Change in Fiduciary Net Position Plan Fiduciary Net Position - Beginning Plan Fiduciary Net Position - Ending (b) Plan Net Pension Liability/(Asset) - Ending (a) - (b) 2015 2016 2017 2018 2019 2020 $ 719,000 $ 743,000 $ 716,000 $ 774,673 $ 736,116 $ 660,456 1,329, 000 1,425,000 1,523,000 1,639, 815 1,731,246 1,716,445 - - 538,000 - - - (110, 000) (1,975,546) 2,100, 000 (683, 589) - (4,236) (323,105) (495,000) (546,000) (631,000) (719,919) (837,663) (983,660) 1,553,000 1,622,000 4,136,000 1,690,333 (1,352,541) 1,393,241 20,790,000 22,343,000 23,965,000 28,101,000 29,791,333 28,438,792 $ 22,343,000 $ 23,965,000 $ 28,101,000 $ 29,791,333 $ 28,438,792 $ 29,832,033 $ 497,000 $ 467,000 $ 312,000 $ 279,830 $ 657,424 $ 609,239 3,177,000 660,000 21,000 2,872,446 1,865,280 1,890,679 (495,000) (546,000) (631,000) (719,919) (837,663) (983,660) (33,000) (47,000) (35,000) (52,639) (39,500) (38,432) 3,146,000 534,000 (333,000) 2,379,718 1,645,541 1,477,826 24,536,000 27,682,000 28,216,000 27,883,000 30,262,718 31,908,259 $ 27,682,000 $ 28,216,000 $ 27,883,000 $ 30,262,718 $ 31,908,259 $ 33,386,085 $ (5,339,000) $ (4,251,000) $ 218,000 $ (471,385) $ (3,469,467) $ (3,554,052) Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 123.90% 117.74% 99.22% 101.58% 112.20% 111.91% Covered Payroll $ 24,363,588 $ 22,739,613 $ 21,593,214 $ 19,909,987 $ 18,246,690 $ 16,119,382 Plan Net Pension Liabilityl(Asset) as a Percentage of Covered Payroll -21.91 %-18.69% 1.01 % -2.37% -19.01 %-22.05% (1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only six years are shown. Notes to Schedule: Benefit Changes: There were no benefit changes in 2019. In 2018, the Benefit Factor used to determine the City Manager's benefit was changed to 0.5% beginning at age 55 instead of age 60. Changes of Assumptions: There were no changes of assumptions in 2019. In 2018, the discount rate was updated from 5.75% to 6.00%, the demographic assumptions were updated to CaIPERS 1997-2015 Experience Study, and the mortality improvement scale was updated to Society of Actuaries Scale MP-2018. 121 CITY OF RANCHO CUCAMONGA PARS RETIREMENT ENHANCEMENT PLAN SCHEDULE OF PLAN CONTRIBUTIONS AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1) 2015 2016 2017 2018 2019 2020 Actuarially Determined Contribution $ 467,000 $ 307,590 $ 278,740 $ 657,424 $ 628,911 $ 626,595 Contribution in Relation to the Actuarially Determined Contribution (467,000) (307,590) (278,740) (657,424) (628,911) (626,595) Contribution Deficiency (Excess) $ - $ - $ - $ - $ - $ Covered Payroll $ 22,739,613 $ 21,593,214 $ 19,909,987 $ 18,246,690 $ 16,119,382 $ 14,750,069 Contributions as a Percentage of Covered Payroll (2) 2.05% 1.42% 1.40% 3.60% 3.90% 4.25% (1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only six years are shown. (2) Due to timing differences for when the plan recognizes contributions and a change in the actuarially determined contribution rate from 1.40% to 3.90% during the fiscal year, the rate does not report the actuarially determined rate of 3.90% for 2018. Note to Schedule: Valuation Date: June 30, 2018 Methods and assumptions used to determine contribution rates: Actuarial cost method Entry Age Normal Cost Method Amortization method Level percentage of payroll Amortization period 9-year fixed period Assets valuation method Investment gains and losses spread over 5-years Discount rate 6.00% Inflation 2.75% Salary Increases 3.0% annually Investment rate of return 6.00% net of pension investment and administrative expenses, including inflation. Retirement aqe CalPERS 1997-2015 Experience Study Mortality Post -retirement mortalitv projected fully generational with Scale MP-2018 122 CITY OF RANCHO CUCAMONGA SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY/(ASSET) AND RELATED RATIOS AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1) Total OPEB Liability Service cost Interest on the total OPEB liability Actual and expected experience difference Changes in assumptions Changes in benefit terms Benefit payments Net change in total OPEB liability Total OPEB liability - beginning Total OPEB liability - ending (a) Plan Fiduciary Net Position Contribution - employer Net investment income Benefit payments Administrative expense Net change in plan fiduciary net position Plan fiduciary net position - beginning Plan fiduciary net position - ending (b) Net OPEB Liability/(Asset) - ending (a) - (b) Plan fiduciary net position as a percentage of the total OPEB liability Covered -employee payroll 2018 2019 2020 $ 400,000 $ 412,316 $ 424,685 1,516, 000 1,562,020 1,606,264 - - (3,896,602) (239,453) (1,046,000) (1,143,902) (1,216,647) 870,000 830,434 (3,321,753) 27,688,000 28,558,000 29,388,434 28,558,000 29,388,434 26,066,681 281,000 998,969 469,195 1,429,000 1,339,488 2,114,944 (1,046,000) (1,143,902) (1,216,647) (14,000) (52,080) (8,528) 650,000 1,142,475 1,358,964 27,617,000 28,267,000 29,409,475 $ 28,267,000 $ 29,409,475 $ 30,768,439 $ 291,000 $ (21,041) $ (4,701,758) 98.98% 100.07% 118.04% $ 15,842,421 $ 16,635,534 $ 16,440,813 Net OPEB asset as a percentage of covered -employee payroll 1.84% -0.13%-28.60% (1) Historical information is required only for the measurement periods for which GASB 75 is applicable. Fiscal Year 2018 was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available. Notes to Schedule: None Changes in assumptions: In 2019, the mortality improvement scale was updated to the Society of Actuaries Scale MP-2019. In December 2019, the ACA Excise Tax was repealed and removed from the actuarial assumptions. 123 CITY OF RANCHO CUCAMONGA SCHEDULE OF CONTRIBUTIONS - OPEB AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1) Actuarially Determined Contribution Contribution in Relation to the Actuarially Determined Contributions Contribution Deficiency (Excess) Covered -employee payroll 2018 2019 2020 $ 998,969 $ 469,195 $ 454,699 (998,969) (469,195) (454,699) $ 16,635,534 $ 16,440,813 $ 17,940,240 Contributions as a percentage of covered -employee payroll 6.01 % 2.85% 2.53% (1) Historical information is required only for the measurement periods for which GASB 75 is applicable. Fiscal Year 2018 was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available. Methods and assumptions used to determine contributions Valuation Date June 30, 2019 Actuarial Cost Method Entry Age, level percentage of payroll Amortization Valuation Method/Period Level percent of payroll over a closed 30-year period starting 2016/17 Asset Valuation Method Investment gains/losses spread over 5-year rolling period with 20% market value corridor Discount Rate 5.50% General Inflation 2.75% Payroll Growth 3.00% per annum, in aggregate Mortality, Disability, Termination, CalPERS 1997-2015 Experience Study; Retirement Mortality Improvement - Mortality projected fully generational with Scale MP-2019 Medical Trend Non -Medicare - 7.25% for 2021, decreasing to an ultimate rate of 4.0% in 2076; Medicare - 6.3% for 2021, decreasing to an ultimate rate of 4.0% in 2076 Other Assumptions PEMHCA minimum increases of 4.25% annually; Healthcare participation for future retirees at 100% for Tier 1 and 75% if Tier 2 for currently covered, and 50% for others 124 CITY OF RANCHO CUCAMONGA Non -Major Governmental Funds Special Revenue Funds Special Revenue Funds account for revenues derived from specific sources which are required by law or administrative regulation to be accounted for in a separated fund. Funds included are: Gas Tax Fund - Established to account for the receipts and disbursements of the state gas tax allocations to fund road construction and maintenance of the City network system. Recreation Fund - Established to account for the receipts and disbursements for community classes, special events, and activities that are sponsored by the Community Services Department, as well as, state and local grants which provide funding for related community services or facilities. Beautification Fund - Established to account for receipts from development projects to provide proper landscaping and irrigation systems after the construction of parkway and median improvements. Landscape Maintenance Fund - Established to account for receipts of special assessments which are restricted for providing landscape maintenance within specified geographical boundaries. Pedestrian Grant Fund - Established to account for the receipts and disbursements of county entitlement funds for the construction of public facilities for the exclusive use of pedestrians and bicycles. Community Development Block Grant Fund - Established to account for Federal grant funding from the Department of Housing and Urban Development under the Housing and Community Development Act of 1974, as amended. Assessment Administration Fund - Established to account for the administration of the various special districts within the City. SB 140 Fund - Established to account for the receipt and disbursement of state matching funds that are restricted for the construction of eligible street construction projects. Air Quality Improvement Fund - Established to account for the receipt and disbursement of funds received from the South Coast Air Quality Management District as a result of Assembly Bill 2766. Masi Commerce Center Fund - Established to acquire the necessary infrastructure from the developer after the completion and acceptance of the approved improvements. Financing was provided by the sale of bonds pursuant to the provisions of the Improvement Act of 1915. Measure I Fund - Established to account for the receipts and disbursements of the City's allocation of the half -cent sales tax collected throughout San Bernardino County for local street construction and maintenance. Library Services Fund - Established to account for the receipts and disbursements for library -related services provided by the City of Rancho Cucamonga Library. Funding for this service is made possible through a transfer of San Bernardino County library property tax revenues to the City of Rancho Cucamonga for library purposes. 125 CITY OF RANCHO CUCAMONGA Non -Major Governmental Funds Special Revenue Funds (Continued) Public Safety Grants Fund - Established to account for the receipts and disbursements of miscellaneous state, local, and Federal grant monies. These receipts are restricted for law enforcement and public safety -related expenditures. Used Oil Recycling Fund - Established to account for the receipts and disbursements of the state grant monies for the purpose of establishing and administering used oil collection programs. These receipts are restricted for oil recycling collection and educational programs. Library Services Grants Fund - Established to account for the receipts and disbursements of miscellaneous state, local, and Federal grant monies not accounted for in other funds. These receipts are restricted for library -related expenditures. AB 2928 Traffic Congestion Relief Fund - Established fund to account for the receipts and disbursements of funds received as a result of Assembly Bill 2928. These receipts are restricted for transportation projects that relieve congestion, connect transportation systems, and provide better goods movement. Litter Reduction Grant Fund - Established to account for the receipts and disbursements of the state grant monies that are used for the collection and recycling of beverage containers at large venues, public areas, residential communities or schools. Energy Efficiency and Conservation Block Grant (EECBG) Fund - Established to account for the receipts and disbursements of Federal grant monies received through the U.S. Department of Energy under the EECBG program. The receipts are restricted for funding projects that reduce energy consumption and promote energy efficiency. SAFETEA-LU Grant Fund - Established to account for the receipts and disbursements of Federal grant monies received from the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) from the Department of Transportation. The receipts are restricted for funding highways, highway safety, and public transportation projects. Underground Utilities Fund - Established to account for fees collected from developments for future undergrounding of overhead utilities. Safe Routes to School Program Fund - Established to account for the receipts and disbursements of Federal grant monies passed -through the State of California. These receipts are restricted for transportation projects that increase the safety of pedestrians and bicyclists. Citywide Infrastructure Improvement Fund - Established to account for capital improvement project reimbursements, primarily from the San Bernardino County Transportation Authority, to provide funds that will be used for general infrastructure throughout the City. Proposition 1 B Fund — Established to account for the receipts and disbursements of Proposition 1 B and Proposition 1 B State -Local Partnership Program (SLPP) funds which provide for the maintenance and improvement of local transportation facilities. This fund is allocated to the City by the California Transportation Commission. Public Resource Grants Fund - Established to account for the receipts from various sources for the Healthy Cities concept, which provides an integrated and holistic approach to improving the overall quality of life in the community. 126 CITY OF RANCHO CUCAMONGA Non -Major Governmental Funds Special Revenue Funds (Continued) Integrated Waste Management Fund - Established to account for receipts from Assembly Bill 939 which are generated from refuse haulers. These receipts are restricted for providing funding for the disposal of household hazardous waste. SB1 - TCEP Fund — Established to account for the receipts and disbursements of SB 1 Trade Corridor Enhancement Program (TCEP) funds which provide for the design and construction of the Etiwanda Grade Separation Project. Public Art Trust Fund — Established to account for the receipts of public art in -lieu fees restricted for the selection, purchase, placement, and maintenance of art installed by the City or on City property. Capital Projects Fund Capital Projects Fund - Established to account for major capital improvement projects not accounted for in other funds. 127 CITY OF RANCHO CUCAMONGA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2020 Special Revenue Funds Landscape Maintenance Gas Tax Recreation Beautification Districts Assets: Cash and investments $ 15,233,817 $ 355,048 $ 627,254 $ 22,039,327 Receivables: Accounts 476,827 324,202 - 40,070 Taxes - - - 114,405 Accrued interest 39,508 2,439 67,460 Other loans - - - Grants - - Prepaid costs 361 - Deposits - - Due from other funds 3,586 - Restricted assets: Cash and investments with fiscal agents - - - - Total Assets $ 15,754,099 $ 679,250 $ 629,693 $ 22,261,262 Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable $ 330,707 $ 477,388 $ $ 785,031 Accrued liabilities 65,409 33,897 119,660 Unearned revenues - 147,648 - Deposits payable 24,762 - Due to other governments - - Due to other funds - - - Total Liabilities 396,116 683,695 904,691 Deferred Inflows of Resources: Unavailable revenues - 666 - Total Deferred Inflows of Resources - 666 - Fund Balances: Nonspendable: Prepaid costs 361 - - Restricted for: Community development projects - - Public safety - police - Parks and recreation - Engineering and public works 15,357,622 629,693 Capital improvement projects - - Underground utilities - Landscape maintenance 21,356,571 Library services - Unassigned - (5,111) - - Total Fund Balances 15,357,983 (5,111) 629,693 21,356,571 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 15,754,099 $ 679,250 $ 629,693 $ 22,261,262 128 CITY OF RANCHO CUCAMONGA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2020 (CONTINUED) Special Revenue Funds Community Pedestrian Development Assessment Grant Block Grant Administration SB 140 Assets: Cash and investments $ - $ 72,418 $ 650,263 $ 36,978 Receivables: Accounts - - - - Taxes - - - Accrued interest - - 2,290 Other loans - 1,254,083 - Grants - 645,417 Prepaid costs - - Deposits - - Due from other funds - - Restricted assets: Cash and investments with fiscal agents - - - - Total Assets $ - $ 1,971,918 $ 652,553 $ 36,978 Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable $ - $ 65,613 $ 13,183 $ Accrued liabilities - 9,970 6,520 Unearned revenues - - - Deposits payable - - Due to other governments - 482,438 Due to other funds 1,739 - - Total Liabilities 1,739 558,021 19,703 Deferred Inflows of Resources: Unavailable revenues - 187,245 - Total Deferred Inflows of Resources 187,245 Fund Balances: Nonspendable: Prepaid costs - - - Restricted for: Community development projects - 1,226,652 632,850 Public safety - police - - - Parks and recreation - - - Engineering and public works - - 36,978 Capital improvement projects - - - Underground utilities - - Landscape maintenance - - Library services - - Unassigned (1,739) - - - Total Fund Balances (1,739) 1,226,652 632,850 36,978 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ - $ 1,971,918 $ 652,553 $ 36,978 129 CITY OF RANCHO CUCAMONGA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2020 Special Revenue Funds Masi Air Quality Commerce Library Improvement Center Measure I Services Assets: Cash and investments $ 740,801 $ 11,128 $ 3,880,289 $ 9,014,353 Receivables: Accounts 56,150 - - 74,805 Taxes - - 579,286 42,986 Accrued interest 2,320 30 11,130 25,006 Other loans - - - - Grants - - Prepaid costs - 3,124 Deposits - - Due from other funds - - 2,685 Restricted assets: Cash and investments with fiscal agents - 301,234 - - Total Assets $ 799,271 $ 312,392 $ 4,470,705 $ 9,162,959 Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable $ 5,641 $ $ 108,888 $ 127,156 Accrued liabilities - 10,094 91,889 Unearned revenues - - Deposits payable 15 Due to other governments - Due to other funds - - - Total Liabilities 5,641 118,982 219,060 Deferred Inflows of Resources: Unavailable revenues - 308,219 - Total Deferred Inflows of Resources - 308,219 - Fund Balances: Nonspendable: Prepaid costs - - 3,124 Restricted for: Community development projects 793,630 - Public safety - police - Parks and recreation - - Engineering and public works - 4,043,504 - Capital improvement projects - 312,392 - 834,212 Underground utilities - - - Landscape maintenance - - Library services - 8,106,563 Unassigned - - Total Fund Balances 793,630 312,392 4,043,504 8,943,899 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 799,271 $ 312,392 $ 4,470,705 $ 9,162,959 130 CITY OF RANCHO CUCAMONGA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2020 (CONTINUED) Special Revenue Funds AB 2928 Library Traffic Public Safety Used Oil Services Congestion Grants Recycling Grants Relief Assets: Cash and investments $ 910,973 $ 49,416 $ 409,340 $ 281,379 Receivables: Accounts - - - - Taxes - - - Accrued interest 309 100 916 Other loans - - - Grants 79,724 Prepaid costs 500 - Deposits - 15,000 Due from other funds - - Restricted assets: Cash and investments with fiscal agents - - - - Total Assets $ 991,506 $ 49,516 $ 410,256 $ 296,379 Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable $ 76,030 $ $ $ Accrued liabilities - Unearned revenues - Deposits payable - Due to other governments - Due to other funds - Total Liabilities 76,030 Deferred Inflows of Resources: Unavailable revenues - Total Deferred Inflows of Resources - Fund Balances: Nonspendable: Prepaid costs 500 Restricted for: Community development projects - Public safety - police 914,976 Parks and recreation - Engineering and public works - 49,516 296,379 Capital improvement projects - - - Underground utilities - Landscape maintenance - - Library services - 410,256 Unassigned - - - - Total Fund Balances 915,476 49,516 410,256 296,379 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 991,506 $ 49,516 $ 410,256 $ 296,379 131 CITY OF RANCHO CUCAMONGA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2020 Special Revenue Funds Energy Litter Efficiency and Reduction Conservation SAFETEA-LU Underground Grant Block Grant Grant Utilities Assets: Cash and investments $ 66,284 $ $ 185,280 $ 11,318,209 Receivables: Accounts 178 - - Taxes - - - Accrued interest - 378 34,574 Other loans - 221,269 - - Grants - - - Prepaid costs - - Deposits - - Due from other funds - 4,673 Restricted assets: Cash and investments with fiscal agents - - - - Total Assets $ 66,462 $ 221,269 $ 185,658 $ 11,357,456 Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable $ - $ $ $ Accrued liabilities - Unearned revenues - Deposits payable - Due to other governments - 221,269 Due to other funds - 96 Total Liabilities - 221,365 Deferred Inflows of Resources: Unavailable revenues - - Total Deferred Inflows of Resources - - Fund Balances: Nonspendable: Prepaid costs - - Restricted for: Community development projects 66,462 - Public safety - police - 185,658 - Parks and recreation - - - Engineering and public works - - Capital improvement projects - - Underground utilities - 11,357,456 Landscape maintenance - - Library services - Unassigned - (96) - - Total Fund Balances 66,462 (96) 185,658 11,357,456 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 66,462 $ 221,269 $ 185,658 $ 11,357,456 132 CITY OF RANCHO CUCAMONGA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2020 (CONTINUED) Special Revenue Funds Safe Routes Citywide Public to School Infrastructure Proposition Resource Program Improvement 1B Grants Assets: Cash and investments $ - $ 24,942,509 $ 260,801 $ 8,498 Receivables: Accounts 42,979 1,207,455 - 5,300 Taxes - - - - Accrued interest 76,523 906 - Other loans - - - Grants - Prepaid costs - Deposits - - Due from other funds 10,264 - Restricted assets: Cash and investments with fiscal agents - - - - Total Assets $ 42,979 $ 26,236,751 $ 261,707 $ 13,798 Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable $ $ 3,184 $ $ 19,358 Accrued liabilities - - Unearned revenues - Deposits payable - Due to other governments - Due to other funds 42,979 - - Total Liabilities 42,979 3,184 19,358 Deferred Inflows of Resources: Unavailable revenues - - - Total Deferred Inflows of Resources - Fund Balances: Nonspendable: Prepaid costs - Restricted for: Community development projects - Public safety - police - Parks and recreation - Engineering and public works - 261,707 - Capital improvement projects 26,233,567 - - Underground utilities - Landscape maintenance Library services - Unassigned - - (5,560) Total Fund Balances - 26,233,567 261,707 (5,560) Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 42,979 $ 26,236,751 $ 261,707 $ 13,798 133 CITY OF RANCHO CUCAMONGA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2020 Assets: Cash and investments Receivables: Accounts Taxes Accrued interest Other loans Grants Prepaid costs Deposits Due from other funds Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable Accrued liabilities Unearned revenues Deposits payable Due to other governments Due to other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund Balances: Nonspendable: Prepaid costs Restricted for: Community development projects Public safety - police Parks and recreation Engineering and public works Capital improvement projects Underground utilities Landscape maintenance Library services Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources, and Fund Balances Capital Projects Special Revenue Funds Fund Total Integrated Capital Nonmajor Waste Public Art Projects Governmental Management SB1 - TCEP Trust Fund Fund Funds $ 3,759,281 $ - $ 138,490 $ 4,975,841 $ 99,967,977 2,402 3,865,393 - - 6,095,761 395,809 - - - 1,132,486 11,765 - 189 16,114 291,957 - - - - 1,475,352 - 725,141 - 3,985 - 15,000 - 21,208 - - - 412,677 713,911 $ 4,169,257 $ 3,865,393 $ 138,679 $ 5,404,632 $ 110,442,778 $ 2,832 $ 530,608 $ $ 2,577,424 $ 5,123,043 44,611 - - 382,050 - - 147,648 - 24,777 - 703,707 - 3,334,785 - 3,379,599 47,443 3,865,393 2,577,424 9,760,824 - 496,130 - 496,130 3,985 2,719,594 1,100,634 - - 138,679 138,679 4,121,814 - - - 24,797,213 - - 2,827,208 30,207,379 - - 11,357,456 - 21,356,571 - 8,516,819 - (12,506) 4,121,814 - 138,679 2,827,208 100,185,824 $ 4,169,257 $ 3,865,393 $ 138,679 $ 5,404,632 $ 110,442,778 134 THIS PAGE INTENTIONALLY LEFT BLANK 135 CITY OF RANCHO CUCAMONGA COMBINING STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2020 Special Revenue Funds Landscape Maintenance Gas Tax Recreation Beautification Districts Revenues: Taxes $ - $ $ $ 11,211,919 Licenses and permits - - 157,780 Intergovernmental 7,466,973 - - Charges for services - 1,801,569 - 21,481 Use of money and property 368,162 791,873 15,985 673,066 Contributions - 169,094 - - Developer participation - - - - Miscellaneous - 145,246 - 1,779 Total Revenues 7,835,135 2,907,782 15,985 12,066,025 Expenditures: Current: General government - - - - Public safety - police - - - Public safety - fire protection - - - - Community development - - - 10,369,436 Community services - 3,457,806 - - Engineering and public works 2,013,868 - 440 1,141 Capital outlay 1,418,756 - 354,904 751,999 Total Expenditures 3,432,624 3,457,806 355,344 11,122,576 Excess (Deficiency) of Revenues Over (Under) Expenditures 4,402,511 (550,024) (339,359) 943,449 Other Financing Sources (Uses): Transfers in 150,000 - - 518,210 Transfers out - (2,208,443) - - Total Other Financing Sources (Uses) 150,000 (2,208,443) - 518,210 Net Change in Fund Balances 4,552,511 (2,758,467) (339,359) 1,461,659 Fund Balances, Beginning of Year 10,805,472 2,753,356 969,052 19,894,912 Fund Balances, End of Year $ 15,357,983 $ (5,111) $ 629,693 $ 21,356,571 136 CITY OF RANCHO CUCAMONGA COMBINING STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2020 (CONTINUED) Special Revenue Funds Community Pedestrian Development Assessment Grant Block Grant Administration SB 140 Revenues: Taxes $ $ $ $ Licenses and permits Intergovernmental 645,417 Charges for services - - Use of money and property 367 16,472 242 Contributions - - - Developer participation - - Miscellaneous 110,777 1,007,120 - Total Revenues 756,561 1,023,592 242 Expenditures: Current: General government - 928,674 - Public safety - police - Public safety - fire protection - - Community development 801,976 - Community services - - Engineering and public works - Capital outlay 1,739 - 9,180 Total Expenditures 1,739 801,976 937,854 - Excess (Deficiency) of Revenues Over (Under) Expenditures (1,739) (45,415) 85,738 242 Other Financing Sources (Uses): Transfers in - - Transfers out - Total Other Financing Sources (Uses) - - - - Net Change in Fund Balances (1,739) (45,415) 85,738 242 Fund Balances, Beginning of Year - 1,272,067 547,112 36,736 Fund Balances, End of Year $ (1,739) $ 1,226,652 $ 632,850 $ 36,978 137 CITY OF RANCHO CUCAMONGA COMBINING STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2020 Special Revenue Funds Masi Air Quality Commerce Library Improvement Center Measure I Services Revenues: Taxes $ $ $ $ 4,711,464 Licenses and permits - Intergovernmental 227,555 3,233,902 23,083 Charges for services - - 161,874 Use of money and property 17,030 3,610 92,350 227,277 Contributions - - - 177,367 Developer participation - Miscellaneous - - - 70,941 Total Revenues 244,585 3,610 3,326,252 5,372,006 Expenditures: Current: General government 16,720 210 Public safety - police - - Public safety - fire protection Community development - Community services - 3,962,492 Engineering and public works - 1,390,635 - Capital outlay 124,425 2,359,881 34,815 Total Expenditures 141,145 210 3,750,516 3,997,307 Excess (Deficiency) of Revenues Over (Under) Expenditures 103,440 3,400 (424,264) 1,374,699 Other Financing Sources (Uses): Transfers in - - 34,651 Transfers out - Total Other Financing Sources (Uses) - - - 34,651 Net Change in Fund Balances 103,440 3,400 (424,264) 1,409,350 Fund Balances, Beginning of Year 690,190 308,992 4,467,768 7,534,549 Fund Balances, End of Year $ 793,630 $ 312,392 $ 4,043,504 $ 8,943,899 138 CITY OF RANCHO CUCAMONGA COMBINING STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2020 (CONTINUED) Special Revenue Funds AB 2928 Library Traffic Public Safety Used Oil Services Congestion Grants Recycling Grants Relief Revenues: Taxes $ - $ - $ - $ Licenses and permits - - - Intergovernmental 590,262 48,179 15,743 Charges for services - - - - Use of money and property 9,026 901 7,959 1,974 Contributions - - - - Developer participation - - - Miscellaneous 38,419 - - - Total Revenues 637,707 49,080 23,702 1,974 Expenditures: Current: General government - - - - Public safety - police 259,146 Public safety - fire protection 84,357 - Community development - 43,154 - Community services - - 1,657 - Engineering and public works - - 80 Capital outlay 45,941 - - - Total Expenditures 389,444 43,154 1,657 80 Excess (Deficiency) of Revenues Over (Under) Expenditures 248,263 5,926 22,045 1,894 Other Financing Sources (Uses): Transfers in 665 - - - Transfers out (57,058) - (34,651) Total Other Financing Sources (Uses) (56,393) - (34,651) - Net Change in Fund Balances 191,870 5,926 (12,606) 1,894 Fund Balances, Beginning of Year 723,606 43,590 422,862 294,485 Fund Balances, End of Year $ 915,476 $ 49,516 $ 410,256 $ 296,379 139 CITY OF RANCHO CUCAMONGA COMBINING STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2020 Special Revenue Funds Energy Litter Efficiency and Reduction Conservation SAFETEA-LU Underground Grant Block Grant Grant Utilities Revenues: Taxes $ - $ $ $ Licenses and permits - Intergovernmental 44,055 181,726 - Charges for services - - 104,124 Use of money and property 481 3,932 294,345 Contributions - - - Developer participation - Miscellaneous - - - Total Revenues 44,536 185,658 398,469 Expenditures: Current: General government - - - Public safety - police - Public safety - fire protection - Community development - Community services - - Engineering and public works 31,116 3,210 Capital outlay - - Total Expenditures 31,116 - 3,210 Excess (Deficiency) of Revenues Over (Under) Expenditures 13,420 185,658 395,259 Other Financing Sources (Uses): Transfers in - - - Transfers out - Total Other Financing Sources (Uses) - - - - Net Change in Fund Balances 13,420 - 185,658 395,259 Fund Balances, Beginning of Year 53,042 (96) - 10,962,197 Fund Balances, End of Year $ 66,462 $ (96) $ 185,658 $ 11,357,456 140 CITY OF RANCHO CUCAMONGA COMBINING STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2020 (CONTINUED) Special Revenue Funds Safe Routes Citywide Public to School Infrastructure Proposition Resource Program Improvement 1B Grants Revenues: Taxes $ $ $ $ Licenses and permits - Intergovernmental 30,633 1,151,160 26,500 Charges for services - - - Use of money and property 651,464 6,908 48 Contributions - - 1,040 Developer participation - Miscellaneous - - - 430 Total Revenues 30,633 1,802,624 6,908 28,018 Expenditures: Current: General government - - - 44,359 Public safety - police - Public safety - fire protection - Community development 70 Community services - - - Engineering and public works 31,065 25,448 Capital outlay - 36,427 - - Total Expenditures 31,065 61,875 70 44,359 Excess (Deficiency) of Revenues Over (Under) Expenditures (432) 1,740,749 6,838 (16,341) Other Financing Sources (Uses): Transfers in - - - Transfers out Total Other Financing Sources (Uses) - - - - Net Change in Fund Balances (432) 1,740,749 6,838 (16,341) Fund Balances, Beginning of Year 432 24,492,818 254,869 10,781 Fund Balances, End of Year $ - $ 26,233,567 $ 261,707 $ (5,560) 141 CITY OF RANCHO CUCAMONGA COMBINING STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2020 Capital Special Revenue Funds Projects Fund Revenues: Taxes Licenses and permits Intergovernmental Charges for services Use of money and property Contributions Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety - police Public safety - fire protection Community development Community services Engineering and public works Capital outlay Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Total Integrated Nonmajor Waste Public Art Capital Governmental Management SB1 - TCEP Trust Fund Projects Fund Funds $ 1,513,591 $ - $ $ 152 $ 17,437,126 35,053 - - 192,833 - 2,478,408 16,243,019 - - 2,089,048 99,602 - 2,389 137,141 3,422,604 - - - - 347,501 - - 136,290 - 136,290 89,465 - - - 1,464,177 1,737,711 2,478,408 138,679 137,293 41,332,598 - - 300 1,043,209 - - - 259,146 - - - 84,357 - - 1,090 11,215,726 - - - 7,421,955 1,297,324 - - 4,794,327 - 2,478,408 - 7,642,952 1,297,324 2,478,408 1,390 32,461,672 440,387 - 138,679 135,903 8,870,926 - - - - 703,526 (218,390) - - - (2,518,542) (218,390) - - - (1,815,016) 221,997 - 138,679 135,903 7,055,910 3,899,817 - - 2,691,305 93,129,914 $ 4,121,814 $ - $ 138,679 $ 2,827,208 $100,185,824 142 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) GAS TAX YEAR ENDED JUNE 30, 2020 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Transfers in Amounts Available for Appropriations Charges to Appropriation (Outflow): Engineering and public works Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 10,805,472 $ 10,805,472 $ 10,805,472 $ 7,505,510 7,828,870 7,466,973 (361,897) 166,140 164,740 368,162 203,422 150,000 150,000 150,000 - 18,627,122 18,949,082 18,790,607 (158,475) 2,596,470 2,273,390 2,013,868 259,522 2,426,000 3,850,470 3,244,741 605,729 5,022,470 6,123,860 5,258,609 865,251 $ 13,604,652 $ 12,825,222 13,531,998 $ 706,776 1 R7r, QRF $ 15,357,983 143 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) RECREATION YEAR ENDED JUNE 30, 2020 Budgetary Fund Balance, July 1 Resources (Inflows): Charges for services Use of money and property Contributions Miscellaneous Amounts Available for Appropriations Charges to Appropriation (Outflow): Community development Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 2,753,356 $ 2,753,356 $ 2,753,356 $ - 2,857,040 2,132,320 1,801,569 (330,751) 1,241,020 1,069,090 791,873 (277,217) 257,580 198,990 169,094 (29,896) 225,560 185,850 145,246 (40,604) 7,334,556 6,339,606 5,661,138 (678,468) 4,773,310 3,978,550 3,457,806 520,744 - 2,283,190 2,208,443 74,747 4,773,310 6,261,740 5,666,249 595,491 $2,561,246 $ 77,866 (5,111) $ (82,977) $ (5,111) 144 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) BEAUTIFICATION YEAR ENDED JUNE 30, 2020 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Engineering and public works Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 969,052 $ 969,052 $ 969,052 $ - 16,560 14,590 15,985 1,395 985,612 983,642 985,037 1,395 440 440 440 - 410,000 420,200 385,677 34,523 410,440 420,640 386,117 34,523 $ 575,172 $ 563,002 598,920 $ 35,918 30,773 $ 629,693 145 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) LANDSCASPE MAINTENANCE DISTRICTS YEAR ENDED JUNE 30, 2020 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Licenses and permits Charges for services Use of money and property Miscellaneous Transfers in Amounts Available for Appropriations Charges to Appropriation (Outflow): Community development Engineering and public works Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 19,894,912 $ 19,894,912 $19,894,912 $ - 11,178,200 11,178,200 11,211,919 33,719 240,000 220,000 157,780 (62,220) 54,720 40,930 21,481 (19,449) 332,780 428,860 673,066 244,206 3,940 3,940 1,779 (2,161) 501,780 518,210 518,210 - 32,206,332 32,285,052 32,479,147 194,095 12,761,280 12,381,210 10,565,922 1,815,288 1,990 1,990 1,141 849 2,589,550 1,449,000 1,003,032 445,968 15,352,820 13,832,200 11,570,095 2,262,105 $ 16,853,512 $ 18,452,852 20,909,052 $ 2,456,200 447 ..51 A $ 21,356, 571 146 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) PEDESTRIAN GRANT YEAR ENDED JUNE 30, 2020 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Amounts Available for Appropriations Charges to Appropriation (Outflow): Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) 451,000 49,740 - (49,740) 451,000 49,740 - (49,740) 451,000 49,740 43,141 6,599 451,000 49,740 43,141 6,599 $ - $ - (43,141) $ (43,141) 41,402 $ (1,739) 147 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) COMMUNITY DEVELOPMENT BLOCK GRANT YEAR ENDED JUNE 30, 2020 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Miscellaneous Amounts Available for Appropriations Charges to Appropriation (Outflow): Community development Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 1,272,067 $ 1,272,067 $ 1,272,067 $ - 1,290,010 1,894,830 645,417 (1,249,413) - - 367 367 150,000 150,000 110,777 (39,223) 2,712,077 3,316,897 2,028,628 (1,288,269) 1,290,010 1,109,830 883,473 226,357 1,290,010 1,109,830 883,473 226,357 $ 1,422,067 $ 2,207,067 1,145,155 $ (1,061,912) 81,497 $ 1,226,652 148 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) ASSESSMENT ADMINISTRATION YEAR ENDED JUNE 30, 2020 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Miscellaneous Amounts Available for Appropriations Charges to Appropriation (Outflow): General government Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 547,112 $ 547,112 $ 547,112 $ - 12,130 10,410 16,472 6,062 1,007,120 1,007,120 1,007,120 - 1,566,362 1,564,642 1,570,704 6,062 1,071,230 1,029,300 928,674 100,626 - 9,180 9,180 - 1,071,230 1,038,480 937,854 100,626 $ 495,132 $ 526,162 632,850 $ 106,688 Budgetary Fund Balance, June 30 (GAAP Basis) $ 632,850 149 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) AIR QUALITY IMPROVEMENT YEAR ENDED JUNE 30, 2020 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): General government Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 690,190 $ 690,190 $ 690,190 $ 541,600 549,540 227,555 (321,985) 16,610 12,570 17,030 4,460 1,248,400 1,252,300 934,775 (317,525) 17,810 19,560 18,270 1,290 973,180 845,830 800,488 45,342 990,990 865,390 818,758 46,632 $ 257,410 $ 386,910 116,017 $ (270,893) 677,613 $ 793,630 150 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) MASI COMMERCE CENTER YEAR ENDED JUNE 30, 2020 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): General government Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 308,992 $ 308,992 $ 308,992 $ - 210 4,580 3,610 (970) 309,202 313,572 312,602 (970) 210 210 210 210 $ 308,992 $ 313,362 210 - 210 - 312,392 $ (970) $ 312,392 151 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) MEASUREI YEAR ENDED JUNE 30, 2020 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Engineering and public works Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 4,467,768 $ 4,467,768 $ 4,467,768 $ - 3,016,420 2,758,350 3,233,902 475,552 50,370 67,430 92,350 24,920 7,534,558 7,293,548 7,794,020 500,472 1,659,720 1,603,310 1,390,635 212,675 2,325,000 4,178,700 4,025,022 153,678 3,984,720 5,782,010 5,415,657 366,353 $3,549,838 $ 1,511,538 2,378,363 $ 866,825 1,665,141 $ 4,043,504 152 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) LIBRARY SERVICES YEAR ENDED JUNE 30, 2020 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Intergovernmental Charges for services Use of money and property Contributions Miscellaneous Transfers in Amounts Available for Appropriations Charges to Appropriation (Outflow): Community services Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budget Amounts Original Final $ 7,534,549 $ 7,534,549 Variance with Final Budget Actual Positive Amounts (Negative) $ 7,534,549 $ - 4,918,300 4,743,220 4,711,464 (31,756) 10,000 19,000 23,083 4,083 187,200 199,600 161,874 (37,726) 116,920 136,830 227,277 90,447 694,610 695,070 177,367 (517,703) 155,940 82,400 70,941 (11,459) - 34,700 34,651 (49) 13,617,519 13,445,369 12,941,206 (504,163) 5,269,570 4,489,830 4,011,997 477,833 580,000 624,280 73,167 551,113 5,849,570 5,114,110 4,085,164 1,028,946 $7,767,949 $ 8,331,259 8,856,042 $ 524,783 R7 RF7 Budgetary Fund Balance, June 30 (GAAP Basis) $ 8,943,899 153 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) PUBLIC SAFETY GRANTS YEAR ENDED JUNE 30, 2020 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Miscellaneous Transfers in Amounts Available for Appropriations Charges to Appropriation (Outflow): Public safety - police Public safety - fire protection Capital outlay Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 723,606 $ 723,606 $ 723,606 $ - 366,840 438,135 590,262 152,127 1,380 1,580 9,026 7,446 - 37,500 38,419 919 - 2,100 665 (1,435) 1,091,826 1,202,921 1,361,978 159,057 360,540 296,110 259,146 36,964 26,730 114,685 84,357 30,328 106,260 89,600 45,941 43,659 - 57,070 57,058 12 493,530 557,465 446,502 110,963 $ 598,296 $ 645,456 915,476 $ 270,020 $ 915,476 154 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) USED OIL RECYCLING YEAR ENDED JUNE 30, 2020 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Community development Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Budget Amounts Original Final $ 43,590 $ 43,590 Variance with Final Budget Actual Positive Amounts (Negative) $ 43,590 $ - 48,830 48,830 48,179 (651) 600 570 901 331 93,020 92,990 92,670 (320) 49,800 50,890 43,154 7,736 49,800 50,890 43,154 7,736 $ 43,220 $ 42,100 49,516 $ 7,416 $ 49,516 155 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) LIBRARY SERVICES GRANTS YEAR ENDED JUNE 30, 2020 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Community services Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 422,862 $ 422,862 $ 422,862 $ - 24,050 67,710 15,743 (51,967) 4,610 5,100 7,959 2,859 451,522 495,672 446,564 (49,108) 27,010 59,390 1,657 57,733 - 34,700 34,651 49 27,010 94,090 36,308 57,782 $ 424,512 $ 401,582 410,256 $ 8,674 $ 410,256 156 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) AB 2928 TRAFFIC CONGESTION RELIEF YEAR ENDED JUNE 30, 2020 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Engineering and public works Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 294,485 $ 294,485 $ 294,485 $ - - - 1,974 1,974 294,485 294,485 296,459 1,974 $ 294,405 $ 294,405 296,379 $ 1,974 $ 296,379 157 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) LITTER REDUCTION GRANT YEAR ENDED JUNE 30, 2020 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 as restated $ 53,042 $ 53,042 $ 53,042 $ Resources (Inflows): Intergovernmental 59,390 59,390 44,055 (15,335) Use of money and property - - 481 481 Amounts Available for Appropriations 112,432 112,432 97,578 (14,854) Charges to Appropriation (Outflow): Engineering and public works 59,390 59,390 31,116 28,274 Total Charges to Appropriations 59,390 59,390 31,116 28,274 Budgetary Fund Balance, June 30 (Budgetary Basis) $ 53,042 $ 53,042 66,462 $ 13,420 Encumbrances - Budgetary Fund Balance, June 30 (GAAP Basis) $ 66,462 158 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) SAFETEA-LU GRANT YEAR ENDED JUNE 30, 2020 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Engineering and public works Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) - 181,726 181,726 - 3,932 3,932 - - 185,658 185,658 310 - - 310 - - - $ (310) $ 185,658 $ 185,658 $ 185,658 159 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) UNDERGROUND UTILITIES YEAR ENDED JUNE 30, 2020 Budgetary Fund Balance, July 1 Resources (Inflows): Charges for services Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Engineering and public works Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Budget Amounts Original Final $10,962,197 $10,962,197 Variance with Final Budget Actual Positive Amounts (Negative) $10,962,197 $ 90,000 90,000 104,124 14,124 198,180 217,520 294,345 76,825 11,250,377 11,269,717 11,360,666 90,949 3,210 9,810 9,788 22 77,000 - - - 80,210 9,810 9,788 22 $11,170,167 $11,259,907 11,350,878 $ 90,971 6,578 $11,357,456 160 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) SAFE ROUTES TO SCHOOL PROGRAM YEAR ENDED JUNE 30, 2020 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Amounts Available for Appropriations Charges to Appropriation (Outflow): Engineering and public works Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 432 $ 432 $ 432 $ - 118,900 32,770 30,633 (2,137) 119,332 33,202 31,065 (2,137) 28,100 33,200 31,065 2,135 90,800 - - - 118,900 33,200 31,065 2,135 $ 432 $ 2 161 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) CITYWIDE INFRASTRUCTURE IMPROVEMENT YEAR ENDED JUNE 30, 2020 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Developer participation Amounts Available for Appropriations Charges to Appropriation (Outflow): Engineering and public works Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $24,492,818 $24,492,818 $24,492,818 $ - 1,250,000 1,000,000 1,151,160 151,160 441,550 481,890 651,464 169,574 2,000 2,000 - (2,000) 26,186,368 25,976,708 26,295,442 318,734 58,140 25,460 25,448 12 290,890 82,010 36,743 45,267 349,030 107,470 62,191 45,279 $ 25,837,338 $25,869,238 26,233,251 $ 364,013 11A $ 26,233,567 162 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) PROPOSITION 1 B YEAR ENDED JUNE 30, 2020 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Community development Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 254,869 $ 254,869 $ 254,869 $ - 4,540 4,990 6,908 1,918 259,409 259,859 261,777 1,918 70 70 70 - 70 70 70 - $ 259,339 $ 259,789 261,707 $ 1,918 $ 261,707 163 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) PUBLIC RESOURCES GRANTS YEAR ENDED JUNE 30, 2020 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Contributions Miscellaneous Amounts Available for Appropriations Charges to Appropriation (Outflow): General government Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 10,781 $ 10,781 $ 10,781 $ 9,730 54,730 26,500 (28,230) - - 48 48 9,510 9,510 1,040 (8,470) 360 360 430 70 30,381 75,381 38,799 (36,582) 9,730 59,730 50,000 9,730 9,730 59,730 50,000 9,730 $ 20,651 $ 15,651 (11,201) $ (26,852) 5,641 $ (5,560) 164 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) INTEGRATED WASTE MANAGEMENT YEAR ENDED JUNE 30, 2020 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Licenses and permits Use of money and property Miscellaneous Amounts Available for Appropriations Charges to Appropriation (Outflow): Engineering and public works Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 3,899,817 $ 3,899,817 $ 3,899,817 $ - 1,335,170 1,511,200 1,513,591 2,391 40,700 40,700 35,053 (5,647) 59,710 66,540 99,602 33,062 100,000 100,000 89,465 (10,535) 5,435,397 5,618,257 5,637,528 19,271 1,302,620 1,319,650 1,297,324 22,326 218,390 218,390 218,390 - 1,521,010 1,538,040 1,515,714 22,326 $ 3,914,387 $ 4,080,217 4,121,814 $ 41,597 $ 4,121,814 165 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) SB1 - TCEP YEAR ENDED JUNE 30, 2020 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Amounts Available for Appropriations Charges to Appropriation (Outflow): Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) 52,150,000 4,000,000 2,478,408 (1,521,592) 52,150,000 4,000,000 2,478,408 (1,521,592) 52,150,000 3,800,000 3,323,564 476,436 52,150,000 3,800,000 3,323,564 476,436 $ - $ 200,000 (845,156) $ (1,045,156) QAti ,r-a Budgetary Fund Balance, June 30 (GAAP Basis) $ - .: CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) PUBLIC ART TRUST YEAR ENDED JUNE 30, 2020 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Developer participation Amounts Available for Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) 1,130 2,389 1,259 137,420 138,679 1,259 Budgetary Fund Balance, June 30 (Budgetary Basis) $ - $ 137,420 138,679 $ 1,259 Encumbrances - Budgetary Fund Balance, June 30 (GAAP Basis) $ 138,679 167 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) CAPITAL PROJECTS FUND YEAR ENDED JUNE 30, 2020 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): General government Community development Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Budget Amounts Original Final $ 2,691,305 $ 2,691,305 Actual Amounts $ 2,691,305 Variance with Final Budget Positive (Negative) - - 152 152 88,170 102,840 137,141 34,301 2,779,475 2,794,145 2,828,598 34,453 300 300 300 - 1,090 1,090 1,090 - 1,390 1,390 1,390 - $ 2,778,085 $ 2,792,755 2,827,208 $ 34,453 $ 2,827,208 168 CITY OF RANCHO CUCAMONGA Internal Service Funds Internal service funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the government and to other government units, on a cost reimbursement basis. Equipment and Vehicle Replacement - Established to account for the accumulation of user charges to various City departments and the costs associated with replacing the City's vehicles. Computer Equipment/Technology Replacement - Established to account for the accumulation of resources and the costs associated with replacing the City's data processing equipment and maintaining current technology. 169 CITY OF RANCHO CUCAMONGA COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS JUNE 30, 2020 Assets: Current: Cash and investments Receivables: Accounts Accrued interest Prepaid costs Total Current Assets Noncurrent: Capital assets - net of accumulated depreciation Total Noncurrent Assets Total Assets Liabilities and Net Position: Liabilities: Current: Accounts payable Accrued interest Capital leases Total Current Liabilities Noncurrent: Capital leases Total Noncurrent Liabilities Total Liabilities Net Position: Invested in capital assets Unrestricted Total Net Position Total Liabilities and Net Position Computer Equipment Equipment/ and Vehicle Technology Replacement Replacement Total $ 1,491,243 $ 2,704,970 $ 4,196,213 - 29,020 29,020 5,057 9,170 14,227 - 507,687 507,687 1,496,300 3,250,847 4,747,147 3,844,638 2,588,457 6,433,095 3,844,638 2,588,457 6,433,095 $ 5,340,938 $ 5,839,304 $ 11,180,242 $ 56,991 $ 7,895 $ 64,886 - 23,369 23,369 - 470,310 470,310 56,991 501,574 558,565 - 995,689 995,689 - 995,689 995,689 56,991 1,497,263 1,554,254 3,844,638 1,122,458 4,967,096 1,439,309 3,219,583 4,658,892 5,283,947 4,342,041 9,625,988 $ 5,340,938 $ 5,839,304 $ 11,180,242 170 CITY OF RANCHO CUCAMONGA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2020 Computer Equipment Equipment/ and Vehicle Technology Replacement Replacement Total Operating Revenues: Interdepartmental charges $ 530,000 $ 584,190 $ 1,114,190 Miscellaneous 44,564 - 44,564 Total Operating Revenues 574,564 584,190 1,158,754 Operating Expenses: Maintenance and operations Contractual services Depreciation expense Total Operating Expenses Operating Income (Loss) Nonoperating Revenues (Expenses): Interest revenue Interest expense Total Nonoperating Revenues(Expenses) Income (Loss) Before Transfers Transfers in Changes in Net Position Net Position: Beginning of Year End of Fiscal Year 207,223 341,095 548,318 4,200 240,901 245,101 984,020 822,127 1,806,147 1,195,443 1,404,123 2,599,566 (620,879) (819,933) (1,440,812) 37,235 77,325 114,560 - (67,253) (67,253) 37,235 10,072 47,307 (583,644) (809,861) (1,393,505) 150,000 527,330 677,330 (433,644) (282,531) (716,175) 5,717,591 4,624, 572 10, 342,163 $ 5,283,947 $ 4,342,041 $ 9,625,988 171 CITY OF RANCHO CUCAMONGA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2020 Cash Flows from Operating Activities: Cash received from interfund services provided Cash paid to suppliers for goods and services Cash received from others Net Cash Provided (Used) by Operating Activities Cash Flows from Non -Capital Financing Activities: Cash transfers in Net Cash Provided (Used) by Non -Capital Financing Activities Cash Flows from Capital and Related Financing Activities: Acquisition and construction of capital assets Principal paid on capital debt Interest paid on capital debt Net Cash Provided (Used) by Capital and Related Financing Activities Cash Flows from Investing Activities: Interest received Net Cash Provided (Used) by Investing Activities Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at End of Year Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities: Operating income (loss) Adjustments to reconcile operating income (loss) net cash provided (used) by operating activities: Depreciation (Increase) decrease in prepaid expense Increase (decrease) in accounts payable Total Adjustments Net Cash Provided (Used) by Operating Activities Computer Equipment Equipment/ and Vehicle Technology Replacement Replacement Total $ 530,000 $ 584,190 $ 1,114,190 (462,319) (503,625) (965,944) 44,564 - 44,564 112,245 80,565 192,810 150,000 527,330 677,330 150,000 527,330 677,330 (435,989) (79,725) (515,714) - (453,174) (453,174) (74,156) (74,156) (435,989) (607,055) (1,043,044) 38,530 72,412 110,942 38,530 72,412 110,942 (135,214) 73,252 (61,962) 1,626,457 2,631,718 4,258,175 $ 1,491,243 $ 2,704,970 $ 4,196,213 $ (620,879) $ (819,933) $ (1,440,812) 984,020 822,127 1,806,147 - 140,684 140,684 (250,896) (62,313) (313,209) 733,124 900,498 1,633,622 $ 112,245 $ 80,565 $ 192,810 172 THIS PAGE INTENTIONALLY LEFT BLANK 173 CITY OF RANCHO CUCAMONGA Agency Funds Agency funds are used to account for assets held by the City as trustee or agent for individuals, private organizations, or other governmental units, and/or other funds. Special Deposits Fund - Established to account for all deposits held by the City in its fiduciary capacity. Assessment District 82-1 Fund - Established to account for assessments received under the Refunding Act of 1984 for 1915 Improvement Act Bonds. Assessments received are restricted for payment of principal, interest and penalties thereon, upon presentation proper coupons. Assessment District 84-2 Fund - Established to account for assessments received under the Improvement Bond Act of 1915. Assessments received are restricted for payment of principal, interest and penalties thereon, upon presentation of proper coupons. Assessment District 85-PD Fund - Established to account for assessments received under the Refunding Act of 1984 for 1915 Improvement Act Bonds and Landscape/Lighting Act of 1972. Assessments received are restricted for payment of principal, interest and penalties thereon, upon presentation of proper coupons Community Facilities District 88-2 Fund - Established to account for assessments received under the Improvement Bond Act of 1915. Assessments received are restricted for payment of principal, interest and penalties thereon, upon presentation of proper coupons. Assessment District 91-2 Fund - Established to account for assessments received under the Improvement Bond Act of 1915. Assessments received are restricted for payment of principal, interest and penalties thereon, upon presentation of proper coupons. Community Facilities District 93-3 Fund - Established to account for assessments received under the Improvement Bond Act of 1915. Assessments received are restricted for payment of principal, interest and penalties thereon, upon presentation of proper coupons. Assessment District 99-1 Fund - Established to account for assessments received under the Improvement Bond Act of 1915. Assessments received are restricted for payment of principal, interest and penalties thereon, upon presentation of proper coupons. Assessment District No. 93-1 Masi Commerce Center Fund - Established to account for assessments received under the Improvement Bond Act of 1915. Assessments received are restricted for payment of principal, interest and penalties thereon, upon presentation of proper coupons. Community Facilities District 2003-01 Series A Fund - This fund is used for the Community Facilities District 2003-01 bond redemption process. The Bond Redemption fund is a short-term rotating fund, generally used to consolidate the collections received from the payments of the property owners upon payment of their annual assessments at the time of payment of their tax bills. Furthermore, the monies in this fund are used to meet the annual principal and semiannual interest payment on the bonds. Community Facilities District 2003-01 Series B Fund - This fund is used for the Community Facilities District 2003-01 bond redemption process. The Bond Redemption fund is a short-term rotating fund, generally used to consolidate the collections received from the payments of the property owners upon payment of their annual assessments at the time of payment of their tax bills. Furthermore, the monies in this fund are used to meet the annual principal and semiannual interest payment on the bonds. Community Facilities District 2000-03 Rancho Summit Redemption Fund - Established to account for assessments received under the Mello -Roos Community Facilities Act of 1982. Assessments received are restricted for payment of principal, interest and penalties thereon, upon presentation of proper coupons. 174 CITY OF RANCHO CUCAMONGA Agency Funds (Continued) Community Facilities District 2000-03 Rancho Summit Reserve Fund - Established to account for the reserve fund held by the trustee. Community Facilities District 2004-01 Fund - This fund is used for the Community Facilities District 2004-01 bond redemption process. The Bond Redemption fund is a short-term rotating fund, generally used to consolidate the collections received from the payments of the property owners upon payment of their annual assessments at the time of payment of their tax bills. Furthermore, the monies in this fund are used to meet the annual principal and semiannual interest payment on the bonds. Community Facilities District 2000-03 Park Maintenance Fund - This fund is used for the maintenance of parks and parkways located within the Community Facilities District No. 2000-03. The District is located south of Summit Avenue on the east and west sides of Wardman Bullock Road. CFD 2018-01 Empire Lakes - Established to account for monies deposited by developers for initial consulting and administrative costs and expenses related to the proposed Community Facilities District 2018-01. Employee Deduction Account Fund - Established to account for the contribution by City employees towards specific employee -paid benefits. Special Tax Refunding Bonds 2015 Fund - Established to account for assessments received for the Community Facilities District No. 2000-01, Community Facilities District No. 2000-02, Community Facilities District No. 2001-01 Special Tax Bonds, Series A, Community Facilities District No. 2001-01 Special Tax Bonds, Series, Community Facilities District No. 2006-01, and Community Facilities District No. 2006-02. This fund accounts for the payment of principal, interest and penalties thereon, upon presentation of proper coupons. 175 CITY OF RANCHO CUCAMONGA COMBINING BALANCE SHEET ALL AGENCY FUNDS JUNE 30, 2020 Special Assessment Assessment Assessment Deposits District 82-1 District 84-2 District 85-PD CFD 88-2 Assets: Cash and investments $ 9,339,264 $ 47 $ 46 $ 2,933,473 $ 4,615,433 Receivables: Accounts 73,198 - - 4,516 - Taxes 70,549 13,264 - Accrued interest - 9,288 10,503 Cash and investments with fiscal agents - - - - - Total Assets $ 9,483,011 $ 47 $ 46 $ 2,960,541 $ 4,625,936 Liabilities: Accounts payable $ 1,462 $ - $ - $ 90,836 $ 3,160 Accrued liabilities - 9,357 - Deposits payable 9,059,560 - - - - Payable to trustee 421,989 47 46 2,860,348 4,622,776 Due to external parties/other agencies - - - - - Total Liabilities $ 9,483,011 $ 47 $ 46 $ 2,960,541 $ 4,625,936 176 CITY OF RANCHO CUCAMONGA COMBINING BALANCE SHEET ALL AGENCY FUNDS JUNE 30, 2020 (CONTINUED) Assets: Cash and investments Receivables: Accounts Taxes Accrued interest Cash and investments with fiscal agents Total Assets Liabilities: Accounts payable Accrued liabilities Deposits payable Payable to trustee Due to external parties/other agencies Total Liabilities AD 93-1 Masi Assessment Assessment Commerce District 91-2 CFD 93-3 District 99-1 Center $ 66,495 $ 4,066 $ 323,196 $ 579,686 740 - - - 209 - 1,125 1,613 - - - 243,092 $ 67,444 $ 4,066 $ 324,321 $ 824,391 918 - 66,526 - 324,321 824,391 - 4,066 - - $ 67,444 $ 4,066 $ 324,321 $ 824,391 177 CITY OF RANCHO CUCAMONGA COMBINING BALANCE SHEET ALL AGENCY FUNDS JUNE 30, 2020 CFD 2000-03 CFD 2000-03 Rancho Rancho CFD 2003-01 CFD 2003-01 Summit Summit Series A Series B Redemption Reserve CFD 2004-01 Assets: Cash and investments $ 916,152 $ 227,478 $ 491,068 $ $ 2,816,219 Receivables: Accounts - - - - Taxes 1,116 - 5,026 18,241 Accrued interest 1,493 498 926 6,252 Cash and investments with fiscal agents 1,429,090 133,617 1,910 261,105 1,197,694 Total Assets $ 2,347,851 $ 361,593 $ 498,930 $ 261,105 $ 4,038,406 Liabilities: Accounts payable $ $ - $ $ $ Accrued liabilities Deposits payable - Payable to trustee 2,347,851 361,593 498,930 261,105 4,038,406 Due to external parties/other agencies - - - - - Total Liabilities $ 2,347,851 $ 361,593 $ 498,930 $ 261,105 $ 4,038,406 178 CITY OF RANCHO CUCAMONGA COMBINING BALANCE SHEET ALL AGENCY FUNDS JUNE 30, 2020 (CONTINUED) CFD 2000-03 Employee Special Tax Park CFD 2018-01 Deduction Refunding Maintenance Empire Lakes Account Bonds 2015 Total Assets: Cash and investments $ 457,788 $ 243,184 $ 63,717 $ 1,791,602 $ 24,868,914 Receivables: Accounts - - - 2,016 79,730 Taxes 4,164 10,206 123,306 Accrued interest 1,782 2,579 36,268 Cash and investments with fiscal agents - - - 776,937 4,043,445 Total Assets $ 463,734 $ 243,184 $ 63,717 $ 2,583,340 $ 29,151,663 Liabilities: Accounts payable $ 22,883 $ - $ - $ - $ 118,341 Accrued liabilities 8,964 - 19,239 Deposits payable - 15,085 - 9,074,645 Payable to trustee 431,887 228,099 - 2,583,340 19,871,655 Due to external parties/other agencies - - 63,717 - 67,783 Total Liabilities $ 463,734 $ 243,184 $ 63,717 $ 2,583,340 $ 29,151,663 179 CITY OF RANCHO CUCAMONGA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2020 Balance Balance July 1, 2019 Additions Deductions June 30, 2020 Special Deposits Assets: Cash and investments $ 8,960,884 $ 1,769,484 $ 1,391,104 $ 9,339,264 Receivables: Accounts 123,900 83,198 133,900 73,198 Taxes 2,494 70,549 2,494 70,549 Total Assets $ 9,087,278 $ 1,923,231 $ 1,527,498 $ 9,483,011 Liabilities: Accounts payable $ 19,534 $ 928,620 $ 946,692 $ 1,462 Accrued liabilities 17,400 - 17,400 - Deposits payable 8,645,168 1,898,635 1,484,243 9,059,560 Payable to trustee 405,176 19,271 2,458 421,989 Total Liabilities $ 9,087,278 $ 2,846,526 $ 2,450,793 $ 9,483,011 Assessment District 82-1 Assets: Cash and investments $ 47 $ - $ - $ 47 Total Assets $ 47 $ $ $ 47 Liabilities: Payable to trustee $ 47 $ $ $ 47 Total Liabilities $ 47 $ $ $ 47 Assessment District 84-2 Assets: Cash and investments $ 46 $ $ $ 46 Total Assets $ 46 $ $ - $ 46 Liabilities: Payable to trustee $ 46 $ $ $ 46 Total Liabilities $ 46 $ $ $ 46 Assessment District 85-PD Assets: Cash and investments $ 2,572,796 $ 1,647,585 $ 1,286,908 $ 2,933,473 Receivables: Accounts 4,077 1,276 837 4,516 Taxes 11,631 13,264 11,631 13,264 Accrued interest 7,674 9,288 7,674 9,288 Total Assets $ 2,596,178 $ 1,671,413 $ 1,307,050 $ 2,960,541 Liabilities: Accounts payable $ 117,422 $ 862,345 $ 888,931 $ 90,836 Accrued liabilities 6,898 9,357 6,898 9,357 Payable to trustee 2,471,858 1,826,525 1,438,035 2,860,348 Total Liabilities $ 2,596,178 $ 2,698,227 $ 2,333,864 $ 2,960,541 180 CITY OF RANCHO CUCAMONGA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2020 Balance Balance July 1, 2019 Additions Deductions June 30, 2020 CFD 88-2 Assets: Cash and investments $ 4,545,259 $ 94,217 $ 24,043 $ 4,615,433 Receivables: Accrued interest 10,474 10,503 10,474 10,503 Total Assets $ 4,555,733 $ 104,720 $ 34,517 $ 4,625,936 Liabilities: Accounts payable $ 8,990 $ 3,160 $ 8,990 $ 3,160 Payable to trustee 4,546,743 144,217 68,184 4,622,776 Total Liabilities $ 4,555,733 $ 147,377 $ 77,174 $ 4,625,936 Assessment District 91-2 Assets: Cash and investments $ 57,642 $ 35,472 $ 26,619 $ 66,495 Receivables: Taxes 647 740 647 740 Accrued interest 183 209 183 209 Total Assets $ 58,472 $ 36,421 $ 27,449 $ 67,444 Liabilities: Accrued liabilities $ 805 $ 918 $ 805 $ 918 Payable to trustee 57,667 37,072 28,213 66,526 Total Liabilities $ 58,472 $ 37,990 $ 29,018 $ 67,444 CFD 93-3 Assets: Cash and investments $ 4,044 $ 26 $ 4 $ 4,066 Total Assets $ 4,044 $ 26 $ 4 $ 4,066 Liabilities: Due to external parties/other agencies 4,044 26 4 4,066 Total Liabilities $ 4,044 $ 26 $ 4 $ 4,066 Assessment District 99-1 Assets: Cash and investments $ 314,714 $ 10,089 $ 1,607 $ 323,196 Receivables: Accrued interest 1,110 1,125 1,110 1,125 Total Assets $ 315,824 $ 11,214 $ 2,717 $ 324,321 Liabilities: Payable to trustee $ 315,824 $ 10,089 $ 1,592 $ 324,321 Total Liabilities $ 315,824 $ 10,089 $ 1,592 $ 324,321 AD 93-1 Masi Commerce Center Assets: Cash and investments $ 554,313 $ 262,179 $ 236,806 $ 579,686 Receivables: Accrued interest 1,573 1,613 1,573 1,613 Restricted assets: Cash and investments with fiscal agents 244,485 2,944 4,337 243,092 Total Assets $ 800,371 $ 266,736 $ 242,716 $ 824,391 Liabilities: Accounts payable $ - $ 2,500 $ 2,500 $ - Payable to trustee 800,371 265,122 241,102 824,391 Total Liabilities $ 800,371 $ 267,622 $ 243,602 $ 824,391 181 CITY OF RANCHO CUCAMONGA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2020 Balance Balance July 1, 2019 Additions Deductions June 30, 2020 CFD 2003-01 Series A Assets: Cash and investments $ 825,917 $ 1,172,219 $ 1,081,984 $ 916,152 Receivables: Taxes 905 1,116 905 1,116 Accrued interest 1,361 1,493 1,361 1,493 Restricted assets: Cash and investments with fiscal agents 1,428,910 43,690 43,510 1,429,090 Total Assets $ 2,257,093 $ 1,218,518 $ 1,127,760 $ 2,347,851 Liabilities: Accounts payable $ - $ 2,000 $ 2,000 $ - Payable to trustee 2,257,093 1,217,024 1,126,266 2,347,851 Total Liabilities $ 2,257,093 $ 1,219,024 $ 1,128,266 $ 2,347,851 CFD 2003-01 Series B Assets: Cash and investments $ 223,496 $ 206,213 $ 202,231 $ 227,478 Receivables: Accrued interest 512 498 512 498 Restricted assets: Cash and investments with fiscal agents 133,606 4,160 4,149 133,617 Total Assets $ 357,614 $ 210,871 $ 206,892 $ 361,593 Liabilities: Payable to trustee $ 357,614 $ 207,921 $ 203,942 $ 361,593 Total Liabilities $ 357,614 $ 207,921 $ 203,942 $ 361,593 CFD 2000-03 Rancho Summit Redemption Assets: Cash and investments $ 456,930 $ 577,806 $ 543,668 $ 491,068 Receivables: Taxes 2,468 5,026 2,468 5,026 Accrued interest 801 926 801 926 Restricted assets: Cash and investments with fiscal agents 107 5,268 3,465 1,910 Total Assets $ 460,306 $ 589,026 $ 550,402 $ 498,930 Liabilities: Accounts payable $ - $ 1,500 $ 1,500 $ - Payable to trustee 460,306 588,101 549,477 498,930 Total Liabilities $ 460,306 $ 589,601 $ 550,977 $ 498,930 CFD 2000-03 Rancho Summit Reserve Assets: Restricted assets: Cash and investments with fiscal agents $ 262,895 $ 3,036 $ 4,826 $ 261,105 Total Assets $ 262,895 $ 3,036 $ 4,826 $ 261,105 Liabilities: Payable to trustee $ 262,895 $ 3,036 $ 4,826 $ 261,105 Total Liabilities $ 262,895 $ 3,036 $ 4,826 $ 261,105 182 CITY OF RANCHO CUCAMONGA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2020 Balance Balance July 1, 2019 Additions Deductions June 30, 2020 CFD 2004-01 Assets: Cash and investments $ 2,469,836 $ 2,719,514 $ 2,373,131 $ 2,816,219 Receivables: Taxes 24,289 18,241 24,289 18,241 Accrued interest 5,174 6,252 5,174 6,252 Restricted assets: Cash and investments with fiscal agents 1,199,132 39,312 40,750 1,197,694 Total Assets $ 3,698,431 $ 2,783,319 $ 2,443,344 $ 4,038,406 Liabilities: Payable to trustee $ 3,698,431 $ 2,777,066 $ 2,437,091 $ 4,038,406 Total Liabilities $ 3,698,431 $ 2,777,066 $ 2,437,091 $ 4,038,406 CFD 2000-03 Park Maintenance Assets: Cash and investments $ 555,061 $ 515,669 $ 612,942 $ 457,788 Receivables: Taxes 1,964 4,164 1,964 4,164 Accrued interest 1,786 1,782 1,786 1,782 Total Assets $ 558,811 $ 521,615 $ 616,692 $ 463,734 Liabilities: Accounts payable $ 15,758 $ 348,917 $ 341,792 $ 22,883 Accrued liabilities 8,121 8,965 8,122 8,964 Payable to trustee 534,932 530,670 633,715 431,887 Total Liabilities $ 558,811 $ 888,552 $ 983,629 $ 463,734 CFD 2018-01 Empire Lakes Assets: Cash and investments $ 15,238 $ 231,834 $ 3,888 $ 243,184 Receivables: Accounts - 229,795 229,795 - Total Assets $ 15,238 $ 461,629 $ 233,683 $ 243,184 Liabilities: Accounts payable $ 134 $ - $ 134 $ - Deposits payable 15,085 - - 15,085 Payable to trustee 19 231,834 3,754 228,099 Total Liabilities $ 15,238 $ 231,834 $ 3,888 $ 243,184 Employee Deduction Account Assets: Cash and investments $ 37,784 $ 350,213 $ 324,280 $ 63,717 Total Assets $ 37,784 $ 350,213 $ 324,280 $ 63,717 Liabilities: Due to external parties/other agencies $ 37,784 $ 164,145 $ 138,212 $ 63,717 Total Liabilities $ 37,784 $ 164,145 $ 138,212 $ 63,717 183 CITY OF RANCHO CUCAMONGA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2020 Balance Balance July 1, 2019 Additions Deductions June 30, 2020 Special Tax Refunding Bonds 2015 Assets: Cash and investments Receivables: Accounts Taxes Accrued interest Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities: Accounts payable Payable to trustee Total Liabilities Totals - All Agency Funds Assets: Cash and investments Receivables: Accounts Taxes Accrued interest Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities: Accounts payable Accrued liabilities Deposits payable Payable to trustee Due to external parties/other agencies Total Liabilities $ 1,765,528 $ 1,826,541 $ 1,800,467 $ 1,791,602 102,016 - 100,000 2,016 6,065 10,206 6,065 10,206 2,356 2,578 2,355 2,579 781,675 24,933 29,671 776,937 $ 2,657,640 $ 1,864,258 $ 1,938,558 $ 2,583,340 $ - $ 6,000 $ 6,000 $ - 2,657,640 1,861,680 1,935,980 2,583,340 $ 2,657,640 $ 1,867,680 $ 1,941,980 $ 2,583,340 $ 23,359,535 $ 11,419,061 $ 9,909,682 $ 24,868,914 229,993 314,269 464,532 79,730 50,463 123,306 50,463 123,306 33,004 36,267 33,003 36,268 4,050,810 123,343 130,708 4,043,445 $ 27,723,805 $ 12,016,246 $ 10,588,388 $ 29,151,663 $ 161,838 $ 2,155,042 $ 2,198,539 $ 118,341 33,224 19,240 33,225 19,239 8,660,253 1,898,635 1,484,243 9,074,645 18,826,662 9,719,628 8,674,635 19,871,655 41,828 164,171 138,216 67,783 $ 27,723,805 $ 13,956,716 $ 12,528,858 $ 29,151,663 184 City of Rancho Cucamonga Comprehensive Annual Financial Report June 30, 2020 Statistical Section Certain schedules recommended for inclusion in Comprehensive Annual Financial Reports of Municipalities by the Government Finance Officers Association have been omitted from this report. The omission of such schedules was made only after careful consideration of the merits of each recommended schedule by City management. 185 THIS PAGE INTENTIONALLY LEFT BLANK This part of the City of Rancho Cucamonga's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information say about the City's overall financial health. Contents Page Financial Trends These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. 189-193 Revenue Capacity These schedules contain information to help the reader assess the factors affecting the City's ability to generate its property and sales taxes. 194-199 Debt Capacity These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future. 200-205 Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place and to help make comparisons over time and with other governments. 206-207 Operating Information These schedules contain information about the City's operations and resources to help the reader understand how the City's financial information relates to the services the City provides and the activities it performs. 208-210 Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. 187 THIS PAGE INTENTIONALLY LEFT BLANK 188 Q Z O � � m N � c ` . 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O )` t� Q N a) w-C U @ O J O <6 > N y 0 -00 N :6 N O m c o °a O co c ca 3 m w w :r Co U Y (o oLL o o c Q m QUUUW LL2OD H U H z 195 CITY OF RANCHO CUCAMONGA Principal Property Taxpayers Current Year and Nine Years Ago 2020 2011 Percent of Percent of Total City Total City Assessed Assessed Assessed Assessed Taxpayer Value Value Value Value Rancho Mall LLC 375,944,570 1.36% 0.00% Homecoming at Terra Vista LLC 279,686,942 1.01 % 117,864,489 0.61 % Prologis/Catellus 188,352,027 0.68% - 0.00% Frito Lay Inc 174,728,229 0.63% - 0.00% MFREVF II - Empire Lakes LLC 139,026,212 0.50% - 0.00% Schlosser Forge Company 137,786,735 0.50% - 0.00% GS Rancho LLC 126,652,448 0.46% - 0.00% Goodman Rancho SPE LLC 115,710,039 0.42% - 0.00% CH Realty VIII MF Rancho Cucamonga 111,353,305 0.40% - 0.00% EQR-Fanwell 2007 LP 108,888,177 0.39% 95,229,844 0.49% Victoria Gardens Mall LLC - 0.00% 239,019,743 1.23% T-Napf Meritage Ownership LLC - 0.00% 154,860,309 0.80% Catellus Development Corporation - 0.00% 140,795,745 0.72% YTC Investments - 0.00% 128,313,168 0.66% Knickerbocker Properties Inc XLVII - 0.00% 85,744,058 0.44% Walmart Stores Inc - 0.00% 82,279,161 0.42% Reef America REIT II Corporation TTTT - 0.00% 78,095,000 0.40% PPF MF 9200 Milliken Ave LP - 0.00% 77,239,636 0.40% 1,758,128,684 6.36% $ 1,199,441,153 6.16% Source: San Bernardino County Assessor 2010/11 and 2019/20 Combined Tax Rolls and the SBE Non Unitary Tax Roll; HdL, Coren & Cone CITY OF RANCHO CUCAMONGA Property Tax Levies and Collections Last Ten Fiscal Years Collected within the Fiscal Taxes Levied Fiscal Year of Levy Collections in Total Collections to Date Year Ended for the Percent Subsequent Percent June 30 Fiscal Year Amount of Levy Years Amount of Levy 2011 95,051,899 89,513,493 94.17% N/A 89,513,493 94.17% 2012 93,318,030 86,742,369 92.95% N/A 86,742,369 92.95% 2013 93,235,913 85,131,812 91.31% N/A 85,131,812 91.31% 2014 95,016,035 93,063,071 97.94% N/A 93,063,071 97.94% 2015 100,428,866 98,457,115 98.04% N/A 98,457,115 98.04% 2016 105,120,614 103,112,427 98.09% N/A 103,112,427 98.09% 2017 108,069,418 107,991,619 99.93% N/A 107,991,619 99.93% 2018 112,950,393 114,778,741 101.62% N/A 114,778,741 101.62% 2019 119,970,594 122,206,002 101.86% N/A 122,206,002 101.86% 2020 126,916,757 128,333,882 101.12% N/A 128,333,882 101.12% Note: Data provided by the San Bernardino County Auditor -Controller for collection of prior year taxes does not segregate the information by fiscal year. Therefore, the City is not able to provide this information in the above schedule. Source: San Bernardino County Auditor-Controller/Treasurer/Tax Collector 197 THIS PAGE INTENTIONALLY LEFT BLANK 198 CITY OF RANCHO CUCAMONGA Business Name Aguilar Trucking Apple Bass Pro Shops Outdoor World Best Buy Cardinal Health 200 Chevron Circle K Cmc Steel California Costco Principal Sales Tax Remitters Current Year and Nine Years Ago 2020 Business Category Heavy Industrial Electronics/Appliance Stores Sporting Goods/Bike Stores Electronics/Appliance Stores Medical/Biotech Service Stations Service Stations Heavy Industrial Discount Department Stores Crossroads Equipment Lease & Fin Trailers/Auto Parts Home Depot Building Materials ICL Performance Products Drugs/Chemicals Living Spaces Furniture Home Furnishings Lowes Building Materials Macys Department Stores Meadowbrook Meat Company Food Service Equip./Supplies My Goods Market Service Stations Ralphs Grocery Stores Liquor Schwarz Paper Company Light Industrial/Printers Shell Service Stations Stater Bros Grocery Stores Liquor Target Discount Department Stores Walmart Discount Department Stores Walters Wholesale Electric Plumbing/Electrical Supplies West End Material Supply Building Materials Business Name American Building Supply Ameron International Apple Bass Pro Shops Outdoor World Best Buy Chevron Costco Dan Reshaw Mobile Day Creek Arco Day Creek Shell Home Depot JC Penney Living Spaces Furniture Lowes Macys Main Electric Supply Monoprice Novartis Animal Health Sears Shell Southwire Stater Bros. Target Walmart Walters Wholesale Electric 2011 Business Category Contractors Contractors Electronics/Appliance Stores Sporting Goods/Bike Stores Electronics/Appliance Stores Service Stations Discount Department Stores Service Stations Service Stations Service Stations Building Materials Department Stores Home Furnishings Building Materials Department Stores Plumbing/Electrical Supplies Fulfillment Centers Medical/Biotech Department Stores Service Stations Energy/Utilities Grocery Stores Liquor Discount Department Stores Discount Department Stores Plumbing/Electrical Supplies Firms listed alphabetically Source: The HdL Companies; State Board of Equalization; California Department of Taxes and Fees Administration; State Controller's Office 199 CITY OF RANCHO CUCAMONGA Ratios of Outstanding Debt by Type Last Ten Fiscal Years Governmental Activities Fiscal Year General Tax Total Ended Obligation Capital Allocation Governmental June 30 Bonds Leases Bonds 1 Loans Activities 2011 - - 395,920,000 19,238,811 415,158,811 2012 2 - - - - - 2013 - 2,615,708 - - 2,615,708 2014 - 2,083,890 - - 2,083,890 2015 - 1,564,076 - - 1,564,076 2016 - 1,034,303 - - 1,034,303 2017 - 486,229 - - 486,229 2018 - - - - - 2019 - 1,919,173 - - 1,919,173 2020 - 1,465,999 - - 1,465,999 Notes: Details regarding the City's outstanding debt can be found in the notes to financial statements This ratio is calculated using personal income and population for the prior calendar year. 2 As a result of the dissolution of the Redevelopment Agency on January 31, 2012, Tax Allocation Bonds and Loans indebtedness was transferred to the Successor Agency. 200 CITY OF RANCHO CUCAMONGA Ratios of Outstanding Debt by Type (Continued) Last Ten Fiscal Years Business -type Activities Lease Revenue Certificates of Bonds Participation Total Business -type Activities Total Primary Government Percentage of Personal Income Debt Per Capita - - - 415,158,811 7.72% 2,321 - - - - 0.00% - - - - 2,615,708 0.05% 15 - - - 2,083,890 0.04% 12 - - - 1,564,076 0.03% 9 - - - 1,034,303 0.02% 6 - - - 486,229 0.01 % 3 - - - - 0.00% - 13,555,938 - 13,555,938 15,475,111 0.27% 86 13,179,158 - 13,179,158 14,645,157 0.24% 83 201 CITY OF RANCHO CUCAMONGA Ratio of General Bonded Debt Outstanding Last Ten Fiscal Years Outstanding General Bonded Debt Fiscal Year General Tax Percent of Percentage Ended Obligation Allocation Assessed of Personal June 30 Bonds Bonds Total Value 1 Income 2 2011 - 395,920,000 395,920,000 2.03% 2012 3 - - - 0.00% 2013 - - - 0.00% 2014 - - - 0.00% 2015 - - - 0.00% 2016 - - - 0.00% 2017 - - - 0.00% 2018 - - - 0.00% 2019 - - - 0.00% 2020 - - - 0.00% Notes: General bonded debt is debt payable with governmental fund resources and general obligation bonds recorded in enterprise funds (of which, the City has none). Assessed value has been used because the actual value of taxable property is not readily available in the State of California. 7.36% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 2 These ratios are calculated using personal income and population for the prior calendar year. 3 As a result of the dissolution of the Redevelopment Agency on January 31, 2012, indebtedness was transferred to the Successor Agency. Per Capita 2 2,213 202 CITY OF RANCHO CUCAMONGA Direct and Overlapping Debt June 30, 2020 City Net Taxable Assessed Value Overlapping Tax and Assessment Debt: Metropolitan Water District Chaffey Community College District Chaffey Union High School District Alta Loma School District Central School District Cucamonga School District Community Facilities District No. 97-1 Etiwanda School District Etiwanda School District CFD No. 7 Etiwanda School District CFD No. 8 Etiwanda School District CFD No. 9 Etiwanda School District CFD Nos. 2004-2 & 2007-1 Etiwanda School District Rancho Etiwanda Public Facilities Authority CFD No. 1 Fontana Unified School District Upland Unified School District City of Rancho Cucamonga CFDs City of Rancho Cucamonga 1915 Act Bonds Total overlapping tax and assessment debt Direct and Overlapping General Fund Debt San Bernardino County General Fund Obligations San Bernardino County Pension Obligations San Bernardino County Flood Control District General Fund Obligations Chaffey Community College District General Fund Obligations Cucamonga School District Certificates of Participation Fontana Unified School District Certificates of Participation West Valley Vector Control District Certificates of Participation Total gross direct and overlapping general fund debt Overlapping Tax Increment Debt (Successor Agency) Total overlapping debt City direct debt Total direct and overlapping debt 3 $ 27,642,356,156 2 City Percentage Total Share of Applicable 1 Debt 6/30/20 Debt 0.894% $ 37,300,000 333,462 22.924% 318,275,000 72,961,361 43.461% 486,526,948 211,449,477 98.788% 57,974,945 57,272,289 97.999% 46,983,660 46,043,517 100.000% 4,295,000 4,295,000 68.749% 90,391,760 62,143,431 21.530% 8,015,000 1,725,630 68.006% 4,380,000 2,978,663 70.844% 7,260,000 5,143,274 100.000% 15,230,000 15,230,000 100.000% 10,920,000 10,920,000 0.556% 170,125,349 945,897 0.122% 95,424,688 116,418 100.000% 63,489,000 63,489'000 3 100.000% 640,000 640,000 1,417,231,350 555,687,419 11.663% 239,140,000 27,890,898 11.663% 237,212,638 27,666,110 11.663% 57,155,000 6,665,988 22.924% 29,955,000 6,866,884 40.077% 4,960,000 1,987,819 0.556% 28,615,000 159,099 31.845% 2,221,501 707,437 599,259,139 71,944,235 100.000% 249,805,000 249,805,000 $ 2,266,295,489 877,436,654 1,465,999 $ 878,902,653 ^ Notes: The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value. 2 Includes aircraft values. For 2020, the net taxable value per HdL Coren & Cone (HdL) was utilized in lieu of the Agency Net Valuation provided by the County of San Bernardino Auditor -Controller's database, as HdL's net taxable value includes parcels from the County Assessor's database that were inadvertently excluded by the Auditor -Controller. The City believes that the data from HdL provides a more accurate picture for the financial statement reader. 3 Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue, and non -bonded capital lease obligations. 4 Qualified Zone Academy Bonds are included based on principal due at maturity. Source: California Municipal Statistics, HdL Coren & Cone 203 a Z O C O a E 0 U � 16 U c N O 2) N 2 co LL (, 2 c H N W � N LL m J O J coo } U 11 00 00 a a O) 0) O N N O N N N M M fA fA 00 00 o 0) 0) O LQ 0 N 7 7 N 0) 0) M M un LO o rn O 0 0 0 M O O N M M n 1n EA EA 0 M M O 7 O 00 00 N LO r- fA fA 00 00 o co c O O 00 00 o N 00 00 6H 613 00 00 0 u i([ O 0) 0) O O LO LO d) d) N u O 00 00 tH 69 10 10 0 N N O M M � t` M M 0 0 0 N 00 00 63 EA 04 0 0) 0) O O O O O 0 0 (o N M M rn rn co (0 0 10 10 O M M 0 00 00 00 00 ui ui N co co O O Ef3 43 (0 (0 0 M M O 00 0 0 O Lq Lq N M M O O 69 61> E w E 0 0 =_ N N = O a _ o a c a 1u m ° m m m E o a o a a a) U) LO LO M P') (0 o0 o0 M N Lq ID 7 M co (O O O N EA 1 (A O � N > � a N > a Y o E o = c U N O o 0 c l0 � LT N n � N M co � E O c a = Q m CL m cc E m a U •• � � N N UZ 00"J m 0 0 ap1i J U N .E N W N 7-0 7 t > O O � U Y 0) N E w N a a c L a O N04 0 0> c ID O O E E O � U a c CD cu a = � c 3 3 N c c r � p N .E cc p = O p U > ry a � � O N j N tl! O f0 � O L L c 3 = o a m m N 375 U = U co !Q � c Q U N w y r 3 N O .° a y > io o EL n y o o a a) Z a$ _ > C 0 o O C O C p O o L .�.. � U cli > 0 > C p a 0 r W � M O ccE°w- y L O 2 E � N � (6 c j O r O > O. ) O co a E ac � 6 a o � ca a d o 10 _ (p N 6 c `p a O N N N O N E N U = O> c C O O N i Fu o N U N = cc c N O N N w _ ii O. N O � N y room �m o 0 O V N r E U n O N LL= N o o u L_ N y F 3 (Li m 204 CITY OF RANCHO CUCAMONGA Pledged -Revenue Coverage Last Ten Fiscal Years (In Thousands) Tax Allocation Bonds Fiscal Year Ended Tax Debt Service June 30 Increment Principal Interest Coverage 2011 69,583 9,070 20,122 2.38 2012 2 51,609 9,520 9,950 2.65 2013 n/a n/a n/a n/a 2014 n/a n/a n/a n/a 2015 n/a n/a n/a n/a 2016 n/a n/a n/a n/a 2017 n/a n/a n/a n/a 2018 n/a n/a n/a n/a 2019 n/a n/a n/a n/a 2020 n/a n/a n/a n/a Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. Tax increment figures are net of related pass -through payments. 2 As a result of the dissolution of the Redevelopment Agency on January 2012 indebtedness was transferred to the Successor Agency. 205 CITY OF RANCHO CUCAMONGA Demographic and Economic Statistics Last Ten Calendar Years Per Personal Capita Income Personal Unemployment Calendar Population (in thousands) Income Rate Year (1) (2) (2) (3) 2010 178,904 5,377,675 30,059 9.4% 2011 169,498 5,190,707 30,624 8.7% 2012 171,058 5,341,115 31,224 6.2% 2013 172,299 5,335,755 30,968 5.4% 2014 174,064 5,402,772 31,039 6.0% 2015 175,251 5,365,133 30,613 4.8% 2016 177,324 5,317,032 29,984 4.2% 2017 176,671 5,586,992 31,623 3.9% 2018 179,412 5,767,788 32,148 3.1% 2019 175,522 5,982,230 34,082 2.9% Sources: (1) California State Department of Finance (2) U.S. Census Bureau (3) California Employment Development Department 1: CITY OF RANCHO CUCAMONGA Principal Employers Current Year and Nine Years Ago* 2020 Number of Employer Employees, Rank Inland Empire Health Plan 2,000 1 Chaffey Community College 1,250 2 Etiwanda School District 1,075 3 Amphastar Pharmaceutical 890 4 City of Rancho Cucamonga 775 5 Alta Loma School District 655 6 Mercury Casualty 600 7 Central School District 545 8 West Valley Detention Center 520 9 Walmart 435 10 Macy's 380 n/a Western Liquidators/Big Lots n/a n/a 2011 Percent of Percent of Total Number of Total Employment Employees, Rank Employment 2.40% n/a n/a n/a 1.50% 1,300 2 1.85% 1.29% 1,312 1 1.86% 1.07% 999 3 1.42% 0.93% 880 4 1.25% 0.79% 783 5 1.11 % 0.72% 509 10 0.72% 0.65% 680 7 0.97% 0.62% 668 8 0.95% 0.52% n/a n/a n/a 0.46% 750 6 1.07% n/a 521 9 0.74% Note: "Total Employment" as used above represents the total employment of all employers located within City limits. Includes full-time and part-time employees. *Only the top ten employers for each year presented have data displayed. If a company did not rank in the top ten employers for both years presented, then one of the two years will state ' n/a". Source: ESRI, Infogroup, Economic and Community Development Department 207 00 LO LO LO Cl)00 00 LO LO CO N M OD O N N Cl) f-_ N CO Cl) Cl) 00 LO O LO ;I- Zd- C14 N Cl) O O N LO CO = O) CO 00 LO O It LO 'IT Cl) N co OD O- N (D LO M C4 O ' 6) 00 �t C) �t 00 LO Cl) OD O N Cfl W N 00 ' O 00 u) - V NT LO N Cl) OD a O O } Z O 0 a E ii 00 v Q V LU N CDN rn (`no o� Cl) LO 00 U U o } N O E C _ ." 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